A situation in the market that occurs when two or more firms compete primarily by lowering their prices is referred to as:
A)pure competition.
B)vertical price fixing.
C)horizontal price fixing.
D)price negotiation.
E)price war.

Question

Quizplus · Accepted Answer

A price war occurs when two or more firms in the market compete primarily by lowering their prices. They try to undercut each other's prices to gain a larger market share. This can lead to a downward spiral of prices, making it difficult for firms to sustain profits.

A Situation in the Market That Occurs When Two or More