What is a legal maximum on the price of a good?
What is a legal maximum on the price of a good? A price ceiling is a legal maximum on the price at which a good can be sold. Examples of price ceilings include rent control, price controls on gasoline in the 1970s, and price ceilings on water during a drought. A price floor is a legal minimum on the price at which a good can be sold.
How do you prove predatory pricing?
Consistent with existing law, the proposed rule would require proof of the following elements: (1) a facilitating market structure, (2) a scheme of predation and supporting evidence, (3) probable recoupment, (4) price below cost, and (5) absence of an efficiencies or business justification defense.
What is an example of predatory pricing?
A prime example of predatory pricing tactics between two large franchises can be seen in the prescription drug price war between Walmart and Target in Minnesota. Walmart, seeking to undercut the competition, initially began offering certain prescription drugs at well below their price floor.
What is unethical pricing?
Perception of unfairness: Unethical pricing practices, such as price discrimination or exploiting vulnerable customers, can lead to a perception of unfairness among customers, which can damage a company's reputation and reduce customer loyalty.
How is predatory pricing illegal?
Predatory pricing is the illegal business practice of setting prices for a product unrealistically low in order to eliminate the competition. Predatory pricing violates antitrust laws, as its goal is to create a monopoly.