When a Company Initiates a Price Cut in an Attempt

question 121

Essay

When a company initiates a price cut in an attempt to dominate the market through lower costs (such as the $1.00 special lunch menus at key fast food restaurants) the company must ensure that it does not fall into certain low cost traps. List these four "traps."

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Definitions:

Federal Court System

The hierarchy of courts at the federal level in the United States, including the Supreme Court, appellate courts, and district courts, responsible for cases involving federal law and constitutional issues.

Arbitration

A form of alternative dispute resolution where a neutral third party, the arbitrator, makes a decision on a dispute outside of court.

Court Trial

A legal process in which a judge (and sometimes a jury) examines the evidence and arguments presented by the parties to make a decision in a dispute.

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