When microsoft introduced its zune mp3 player, some people thought it would capture the mp3 player market by pricing its product so low that a smaller competitor, like the apple ipod, would be unable to compete and have to quit the market. if microsoft had used this approach, it would be guilty of

Predatory pricing.

Predatory pricing is pricing your products so low that you steal a majority of your competitiors customers and cause them to either close down or at the very least discontinue that product due to lack of sales. Do not confuse this with limit pricing, which is lowering prices to keep out any new firms, whereas predatory pricing deals with firms already in the market.

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