Question

When one gas station lowers its price a penny, the station on the other corner of the intersection lowers its price, followed by the gas stations on the next block, and so on, until nearly every gas station in town has lowered its price. This situation illustrates ________.a. a differentiation strategy.b. intense rivalry among competitors.c. the treat of substitutes.d. a cost leadership strategy.

Answer 1

b. intense rivalry among competitors.

Step-by-step explanation:

In the market place competitors exist trying to gain an upper hand over each other. They do this by adopting a strategy that will give them an edge over the other firms.

Some examples of strategy used by competitors to get ahead include differentiation strategy and price leadership strategy.

In the given scenario one gas station lowers its price a penny. Because of intense rivalry between competitors they did not allow the gas station maintain the price advantage.

Rather the station on the other corner of the intersection lowers its price, followed by the gas stations on the next block, and so on, until nearly every gas station in town has lowered its price.