Price wars tend to be disadvantageous to retailers. Why, therefore, would a retailer want to lower prices and take the chance of inciting a price war?
A) To reduce long-term costs
B) To raise profit margins
C) To develop a sustainable advantage
D) To enter a new market
E) To boost market share

Question

Quizplus · Accepted Answer

A retailer may want to lower prices to increase its market share, which can bring in more customers and potentially increase long-term profits. By taking the risk of inciting a price war, the retailer may be able to gain a competitive advantage and establish itself as a preferred choice for customers. This can lead to increased loyalty and repeat business, ultimately resulting in higher profits in the long run.

Price Wars Tend to Be Disadvantageous to Retailers