Price cuts in economic downturns are primarily aimed at:
A) increasing short-term profits.
B) defending a firm's position vigorously.
C) compensating for low quality products.
D) capturing market share.

Question

Quizplus · Accepted Answer

Price cuts in economic downturns are primarily aimed at capturing market share. During downturns, consumers become more price-sensitive as they have less money to spend. Therefore, companies may lower their prices to attract more customers and gain market share, even if it means sacrificing short-term profits. This strategy can ultimately help the company gain a competitive advantage and increase profits in the long run. The other options are not the primary motives for price cuts in economic downturns.

Price Cuts in Economic Downturns Are Primarily Aimed At