Which of the following conditions does not tend to heat up price competition?
A)Many sellers in the market
B)Products are differentiated/buyers have high switching costs
C)Some firms have excess capacity
D)The industry is stagnant or declining
E)There are large/infrequent sales orders

Question

Quizplus · Accepted Answer

When products are differentiated or buyers have high switching costs, it becomes difficult for competitors to directly compare prices and engage in price competition. This tends to result in less price-focused competition and instead pushes firms to differentiate their products in other ways.

Which of the Following Conditions Does Not Tend to Heat