Areeda Turner Test Law and Legal Definition

Areeda turner test refers to an economic test used in the U.S. it is a cost-based test that determines for predatory pricing whereby a price below average variable cost is presumed to be illegal or predatory. Areeda turner test is widely accepted by federal courts. Areeda turner test is named after the coauthors of an influential law-review article written by Philip Areeda and Donald F. Turner.

Many economists have objected to the Areeda-Turner test as not economically pure. However the courts in the U.S. continue to use the Areeda-Turner test. The courts do not use this cost-based test solely to establish a conclusive presumption of predatory pricing but rather they are used to establish below-cost prices that creates a presumption of predation.