Question
Predatory pricing plays a significant role in creating entry barriers in a market. It is a strategy where a dominant firm sets its prices very low or even below cost to drive competitors out of the market or to prevent new competitors from entering the market. This strategy can be effective in the short term, but it can also lead to a monopoly, which can have negative effects on the market in the long term. It's important to note that predatory pricing is considered illegal in many jurisdictions due to its anti-competitive nature.
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Use this slide to list all artificial (strategic) and natural entry barriers. These include high set-up and high R&D costs, predatory pricing, network effects, ownership or control and other barriers. With this slide, share your knowledge and data about barriers to exit. These barriers include highly specialized assets and high exit costs: asset write-offs and closure costs and the loss of customer goodwill. Populate this slide with examples of entry and exit barriers backed up by quantitative data to support your findings. We included analysis of entry and exit barriers for Amazon's rival, Alibaba, below.
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