Price Wars Tend to Be Disadvantageous to Retailers

question 163

Multiple Choice

Price wars tend to be disadvantageous to retailers. Why, therefore, would a retailer want to lower prices and take the chance of inciting a price war?

• A) To reduce long-term costs
• B) To raise profit margins
• C) To develop a sustainable advantage
• D) To enter a new market
• E) To boost market share

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Definitions:

Sales Mix

The composition of different products or services that a company sells, influencing overall profitability.

Contribution Margin Mix

A measure used in analyzing the relative profitability of different products or services, calculated by subtracting variable costs from sales to determine the contribution of each towards fixed costs and profits.

Sales Mix

refers to the proportion of different products or services that a company sells, impacting overall sales and profitability.

Bins

Containers or designated spaces used for storing inventory items in a structured manner.