Why would a firm want to discourage competitors from trying to compete on price? Why not...
Homework Answers
The firm's try to discourage their competitors when it comes to price competition because if they don't discourage then it will lead to fixing a higher price or lower price than their competitors. If they fix a price higher than their competitors price then it will lead to lose market share and there by decline in the revenue.
On the other hand if the price fixed is lower than their competitors then the company may not be able to recover their cost from the sales revenue or they end up with zero or negative profit.
So both situation is detrimental to the business firm a d that is the reason they discourage price competition.
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Why would a firm want to discourage competitors from trying to
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