When a Competitor Cuts Its Price,a Company Is Most Likely

question 11

Multiple Choice

When a competitor cuts its price,a company is most likely to decide to ________ if it believes it will not lose much market share or would lose too much profit by cutting its own price.

• A) stabilize its production costs
• B) reduce its marketing costs
• C) hold its current prices and profit margin
• D) increase its marketing budget to raise the perceived value of the product
• E) increase its production costs to improve the quality of the product

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Definitions:

Boston Red Sox

An American professional baseball team based in Boston, Massachusetts, playing in Major League Baseball's American League East division.

Lowball Technique

Getting a commitment from a person and then raising the cost of that commitment.

Current Market Rate

The prevailing rate at which goods, services, or securities are bought and sold in the market at a given time.

Expensive Extra Equipment

High-cost additional pieces of hardware or accessories that are not essential for basic operation but may enhance functionality or experience.