Q. Which of the following impacts of predatory pricing are not correct?
1. Low prices for the product in the long run
2. Creation of monopoly
3. Increase in choice for customers
Select the correct answer using the codes given below

[A] 1 and 2 only

[B] 2 only

[C] 1 and 3 only

[D] 3 only

Answer: C

In a predatory pricing scheme, prices are set low to attempt to drive out competitors and create a monopoly.

Consumers may benefit from lower prices in the short term, but they suffer if the scheme succeeds in eliminating competition, as this would trigger a rise in prices and a decline in choice.