A price-cutting strategy will keep out an entrant that plans to adopt a new production technology.

Question

Quizplus · Accepted Answer

A price-cutting strategy may not necessarily keep out an entrant that plans to adopt a new production technology. The entrant may have lower production costs with their new technology and may be able to compete even with lower prices from established competitors. Additionally, a price-cutting strategy may not be sustainable in the long-term as it can erode profit margins and lead to a race to the bottom among competitors.

A Price-Cutting Strategy Will Keep Out an Entrant That Plans