Isabella is a product manager for The Container Store, a retailer of plastic bins and other storage containers. Sales have been declining in the past nine months and her management team is pressuring her to compete based on price discounts. However, Isabella is aware of the dangers associated with engaging in price competition. She knows that competitors can also change prices quickly and aggressively, which can result in a(n) ____ that will be harmful to both companies.
A) reduction in cost
B) price war
C) competitive game
D) industry collapse
E) advertising battle

Question

Quizplus · Accepted Answer

The scenario described indicates that Isabella is hesitant to engage in price competition because of the potential risk of a price war. A price war is a situation where competitors continuously lower prices in order to attract customers, which can ultimately result in reduced profits and even the collapse of the industry. Therefore, the best choice is B.

Isabella Is a Product Manager for the Container Store, a Retailer