market position where the losses can be recovered by setting supracompetitive prices . Predatory pricing refers to the process of elimination of competition by setting predatory prices, prices that are so low that they drive the competition out of the market thus enabling the establishment of monopoly where a company can recoup their loss and generate more profit by setting supracompetitive prices. Characteristics There are two main stages that are present in the strategy of predatory, i.e. supracompetitive pricing that include predation stage and post-predation stage (Weismann, 2006). Predation phase is focused on lowering of the prices, usually below some measure of economic cost. This is known as an incremental cost and the main purpose is to make the competitor companies to leave the market. The second phase is post-predation phase where the company raises the prices of their products and services to supracompetitive level . Taking that into account, it is possible to derive two main characteristics of supracompetitive prices (Baumol, 2003): • Supracompetitive prices are used to gain monopolistic market position and regain losses that occurred in the predatory phase, • Supracompetitive prices have no legitimate business justification besides regaining losses realized during the predatory phase. Consequences It is considered that traditional predatory strategy that includes setting supracompetitive prices in a regular market can’t be sustained and it is considered to be irrational . There is an ongoing debate regarding supracompetitive pricing, i.e. if there is the necessity for state authorities to pursue companies that are setting supracompetitive prices. There is an ongoing debate, as well as growing number of articles that are well informed about the issues of excessive pricing and its impact on the economy and many of those have proposed that different countries need to establish a set of measures that are most appropriate in their country regarding supracompetitive pricing (Nair, Mondliwa, 2015). This type of intervention should especially be considered in small economies where self-correction ability of the market is limited. In big markets there some arguments against intervention regarding supracompetitive prices. Those include the following : • Supracompetitive prices are self-regulating. The first argument against state intervention and regulation of supracompetitive pricing is that supracompetitive prices are self-correcting. That statement is based on two main arguments. Firstly, supracompetitive prices attract new entrants to the market that can easily gain market share by offering products and services at a lower price compared to the