Predatory pricing is outlawed by which acts?

• A. Sherman Act
• B. Federal Trade Commission Act
• C. Sherman Act and Federal Trade Commission Act
• D. Clayton Act

Answer: (C)

Predatory pricing is an anticompetitive tactic where a firm temporarily lowers prices to push competitors out of the market, with the aim of raising prices later and monopolizing. The best way to address this behavior under U.S. law is through two statutes that target unfair or anticompetitive practices: the Sherman Act and the Federal Trade Commission Act. The Sherman Act, particularly its provisions against monopolization, covers actions intended to acquire or maintain monopoly power, including strategies like deliberate below-cost pricing aimed at eliminating competition. The Federal Trade Commission Act prohibits unfair methods of competition and unfair or deceptive acts or practices, which can include predatory pricing when it harms competition and consumers. The Clayton Act does address various anticompetitive concerns, but it doesn’t specifically outlaw predatory pricing, making the combination of the Sherman Act and the FTC Act the most direct and applicable framework for this issue.