Bunnings Hardware advertises that if a customer happens to find a cheaper price on one of their stocked items at a competing store, they will beat that price by 10 per cent. Which of the following factors is most likely to allow Bunnings to compete on price in this way?
A) Low variable costs.
B) Low fixed costs.
C) Economies of scale in purchasing.
D) A higher break-even point.
E) Its marginal cost on their products exceeds their average cost.

Question

Quizplus · Accepted Answer

explain the role of competitive analysis in determining pricing. For Bunnings to make an offer like this, it has to be confident that it is the lowest cost supplier. This is plausible given its sales volumes and economies of scale.

Bunnings Hardware Advertises That If a Customer Happens to Find