Question

Megan Johnson owns a kitchen and bathroom cabinet company. Her market research is telling her that she is taking business away from the large home improvement stores in her trade area. One thing that Megan is worried about is that the large stores might fight back by lowering their prices, which hurts everyone except the consumer. The day-to-day challenge of firm growth that this example is referring to is _______

Answer 1

Answer: Price war

Step-by-step explanation:

Price war is a market strategy in which a firm lowers it's price in comparison to the prices of other seller's in the market in order to gain absolute control of the Consumers patronage.

Price war it's more prevalent in a market where the sellers sell differentiated products either through branding or qualities.

The firm also employed advertising to drag home the superiority of their products and cheap prices.