Exclusivez, a leading jeweler, offers a pair of diamond earrings for $2000, a price that is 40 percent lower than that of its competitors. Exclusivez aims to use this strategy to drive its competitors out of business and become the market leader in diamond jewelry. This is an example of

Predatory Pricing

Explanation:

As the word "predator" conveys i.e animals who live by preying on other animals, predatory pricing refers to an act of pricing goods by a seller at substantially lower rate than the competitors so as to assume control of the whole market and drive out the competing firms.

Predatory pricing is illegal as it goes against the concept of healthy competition within sellers and competitive markets. A healthy competition is necessary in the market to ensure buyers get quality products and to keep monopoly in check.

In the given case, a jeweler offers it's product i.e diamond earrings at substantially lower price than that of competitors with an aim to drive out competitors and become the market leader. This is a case of Predatory Pricing.

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