Short answers, pulled from the story.
Supracompetitive pricing is the act of charging more than a competitive market can sustain. This figure often signals that a business holds a unique legal or competitive advantage. It may also indicate anti-competitive behavior that has successfully driven rivals from the marketplace.
William J. Baumol described this dynamic strategy in his 2003 work Economics: Principles and Policy. The process involves two distinct phases known as predation and post-predation. During the first phase, prices drop below some measure of economic cost called incremental cost to force existing competition out of the market.
Patents on new formulations legally prevent other companies from entering the market unless they license rights. These intellectual property protections allow the original innovator to maintain dominance for years. Brand strength acts as a different type of wall against new challengers.
Antitrust laws struggle to distinguish between welfare-enhancing strategies and those reducing consumer welfare because authorities must decide if the price threatens an efficient competitor's survival or lacks justification. Phillip E. Areeda and Donald F. Turner explored these issues under Section 2 of the Sherman Act in 1975. The lack of appropriate regulation means authorities often rely on periodic fines rather than structural fixes.