What factor typically prompts the use of predatory pricing?

Predatory pricing typically occurs when a company sets prices extremely low, often below costs, with the primary aim of driving competitors out of the market. This strategy aims to establish a dominant position in the industry by eliminating rival firms that can't sustain such low pricing. Once competitors are forced out, the company can then raise prices to recover costs and potentially increase profits.

While customer satisfaction, brand image, and long-term relationships are important marketing considerations, they do not directly lead to predatory pricing strategies. Instead, those factors could be associated with more customer-centered approaches that emphasize quality and value rather than a focus on eliminating competition. Therefore, the intent to drive out competition is the primary motivator for engaging in predatory pricing practices.