Which of the following is a possible trap of a price-cutting strategy?
A) Low prices usually achieve increases in both market share and market loyalty when customers switch.
B) The company might need additional business because it has excess plant capacity.
C) The company can initiate price cuts to dominate the market through lower costs.
D) Consumers might not demand price concessions in the future.
E) Competitors that match low prices might have longer staying power because of deep cash reserves.
Answer: E) Competitors that match low prices might have longer staying power because of deep cash reserves.