[bmurphy1976]

Predatory pricing:

A big gorilla comes in and under prices the entire market. They can do that because they already have tons of money. They do this long enough to break the market and drive the competition out of business. Once the competitors are gone they jack up the prices to unprecedented levels because there's no more alternatives available and bleed the market for all the money.

Regular pricing:

Charge a fair price based on actual costs.

[twoodfin]

This presupposes some athletic new competitor can’t enter the market and take the margin off the fat incumbent.

It’s why we have capital markets: If capturing a profitable opportunity requires spending some money, someone who wants to profit will send that money your way.

[spockz]

But it should only be because they indeed have lower margins or more efficient operations. It should not be funded by external money (other departments or investors), only to undercut competition too force them out only to raise prices to above the previous point after.

So a simple law could be that prices can only be raised to the point where they were at before the competition was squashed.

[nothrabannosir]

You can do this to a low margin business. In fact you can increase the margin once the dust settles.