PREDATORY PRICING: A PROPOSED STRUCTURED RULE OF REASON.

The article presents information on predatory pricing which is one of the important exclusionary practices which is a core problem of monopolization in the U.S. and the European Union (EU) law. A focus is on the rules for identifying predatory pricing based on finance theory, management for decisions related to investments and market strategies. The issues related to social welfare, strategies related to linear and nonlinear pricing and several tests based on the case laws are also discussed. Theory related to average variable cost, long-term average total cost and long-run average incremental cost are also discussed.