When Challenged by an Aggressive Competitor, the Immediate Thought That

question 71

Essay

When challenged by an aggressive competitor, the immediate thought that comes to mind for many managers is to fight back and match the price cut. However, because price wars can be quite costly, experts suggest that a more systematic process should be followed. Describe the factors that a strategist should consider before matching a price cut by a rival.

Apply economic concepts to interpret graphical representations of market conditions in monopolistic and oligopolistic markets.

Explain the concept of rent-seeking behavior in the context of market protection granted by the government.

Understand the implications of marginal cost pricing versus average cost pricing for regulated monopolies.

Understand and apply basic principles of budgeting and forecasting.

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Definitions:

Federal Government

The national government of a federal country, which holds the authority to govern the nation as a whole, in contrast to state or local governments.

Common Crop

A plant or agricultural product that is widely grown and harvested for food, feed, fuel, and other uses in a particular region or country.

Christianizing

The process of converting individuals or groups to Christianity.

Tribal Government

The governing body or system of administration used by indigenous tribes to manage their affairs, often based on traditional customs and laws.