Competitive price decreases are more likely to be ignored by a company when _______.
A)excess demand exists
B)falling costs occur
C)build objective exists
D)none of the above

Question

Quizplus · Accepted Answer

When there is excess demand, a company may not feel the need to lower prices as they are already selling their products or services without having to lower prices. This is because customers are willing to pay the current price because they perceive the product or service to be valuable enough. Therefore, a competitive price decrease may be unnecessary and ignored. Falling costs may lead to a reduction in price to maintain profit margins, and build objective may require the company to lower prices to gain market share or improve customer satisfaction. However, in the absence of excess demand, competitive price decreases may be more effective in attracting customers and increasing sales.

Competitive Price Decreases Are More Likely to Be Ignored by a Company