There are two shoe stores in a small town. Store a is selling a pair of running shoes for $ 39.50. If it costs Store a $ 40 to order this pair of shoes from the factory, then what is Store A doing?

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Business

Villegas

16 August, 18:45

There are two shoe stores in a small town. Store a is selling a pair of running shoes for $ 39.50. If it costs Store a $ 40 to order this pair of shoes from the factory, then what is Store A doing?

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Julianne Alexander · Answer 1

There are two shoe stores in a small town. Store a is selling a pair of running shoes for $ 39.50. If it costs Store a $ 40 to order this pair of shoesfrom the factory, then Store A is practicing predatory pricing.

This store is most likely selling running shoes below the cost of production to drive the other shoe store out of business or at least to discourage them from selling the same running shoe.