Woolworths and Coles Often Compete on Price

Woolworths and Coles often compete on price. For example Coles began a 'price war' selling milk at $1 per litre, an offer that Woolworths quickly matched. The retailers are aware that the cost of their electricity and water for example, are not negotiable like the costs of many of the products that they buy such as milk and bread. Coles and Woolworths managers understand that:

A) price competition is undesirable for a seller unless it has a cost advantage over competitors.
B) an organisation choosing to compete on aspects other than price has greater power to decide on the profit margin per unit sold for its products.
C) some government owned monopolies price products below cost.
D) All of the options listed.
E) Both a and b.