Final answer:
Predatory pricing involves pricing below cost to eliminate competitors and is a tactic employed by some major firms.
Explanation:
Predatory pricing involves pricing below cost in order to drive a rival out of business. It is challenging for a firm to engage in predation as it requires the ability to recoup losses once the rival is eliminated. For instance, firms like American Tobacco, Standard Oil, and AT&T have been accused of engaging in predatory pricing.
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