Pricing Wars
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Price war is a term used in economic sector to indicate a state of intense competitive rivalry accompanied by a multi-lateral series of price reduction. One competitor will lower its price, then others will lower their prices to match. If one of them reduces their price again, a new round of reductions starts. In the short term, price wars are good for consumers, who can take advantage of lower prices. Often they are not good for the companies involved. The lower prices reduce profit margins and can threaten their survival. In the medium to long term, they can be good for the dominant firms in the industry. Typically, the smaller, more marginal, firms cannot compete and must close. The remaining firms absorb the market share of those that have closed. The real losers then, are the marginal firms and their investors. In the long term, the consumer may lose too. With fewer firms in the industry, prices tend to increase, sometimes higher than before the price war started. ContentsFrom Wikipedia under the
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Q. Asked by girlsrule688 - Tue Apr 20 17:47:08 2010 - Other - Business & Finance - 2 Answers - Comments A. Retail especially if you are a starter they can close you down. Why do you say 'was' because its an ongoing problem Answered by Persuations8 - Tue Apr 20 17:51:15 2010 From Yahoo Answer Search: "pricing wars" |
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