Firms competing in industries where prices change frequently and without notice, and where individual companies must react quickly to price changes, are likely to consider:
A) employing price leadership
B) establishing a one- price policy.
C) developing a price- reaction programme.
D) seeking government intervention.
E) all of the above

Question

Quizplus · Accepted Answer

In industries where prices change frequently and without notice, firms must develop a price-reaction program to be able to quickly adjust prices in response to competitors' price changes. Employing price leadership or establishing a one-price policy may not be effective in such industries where prices are constantly fluctuating. Seeking government intervention may not be a feasible option in a competitive market where prices are determined by market forces. Therefore, developing a price-reaction program is the best choice for firms in such industries.

Firms Competing in Industries Where Prices Change Frequently and Without