Lily's Floral Creations is located in a large town that has several other florists. Lily is likely to find that the presence of many larger competitors means that the only way she can survive is to charge rock-bottom prices.

Question

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Firms often try to avoid competing on prices because price changes usually are easy for competitors to match. In fact, cutting prices may set off a price war. Moreover, keeping prices very low is likely to hurt profit margins. Thus, instead of using a low-price strategy, many firms try to compete on nonprice factors such as fast delivery, friendly service, personalized treatment, quality, creativity, or other factors.

Lily's Floral Creations Is Located in a Large Town That