Predatory pricing (also
undercutting) is a
pricing strategy where a product or service is set at a very low price, intending to drive competitors out of the
market, or create
barriers to entry for potential new competitors. If competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. The predatory merchant then has fewer competitors or is even a
de facto monopoly.