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Answer #1

1) (D) to increase Output and lower prices

Predatory pricing involves charging very low prices, the aim being to get rid of competitors so that the supplier can charge considerably higher prices later. The predator is willing to sell at a loss – below cost – for a period, in the hope that its rivals either go bust or decide stop selling that product. So, it’s purpose is definitely not to increase output at the moment and to not to reduce price in the long run.

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