When a competitor cuts its price,a company is most likely to decide to _ if it believes it will not lose much market share or would lose too much profit by cutting its own price.
A)increase its marketing budget to raise the perceived value of the product
B)maintain its current prices and profit margin
C)increase its production costs to improve the quality of the product
D)reduce its marketing costs
E)stabilize its production costs

Question

Quizplus · Accepted Answer

If a company believes that cutting its price will result in losing too much profit, it is best to maintain its current prices and profit margin. This may involve focusing on other factors such as quality, product features, or customer service to differentiate itself from the competitor instead of engaging in a price war. Increasing marketing budget or production costs may not necessarily be effective or feasible in this scenario, and reducing marketing costs may result in reduced brand awareness and customer engagement. Stabilizing production costs may be important for long-term planning, but it may not be the immediate solution to responding to a competitor's price cut.

When a Competitor Cuts Its Price,a Company Is Most Likely