Discrepancies in profitability tempt rivals to charge the more profitable consumers somewhat lower prices in order...
Discrepancies in profitability tempt rivals to charge the more profitable consumers somewhat lower prices in order to lure them away from the firm that is "overcharging" them. This practice is referred to as
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Homework Answers
Option B.
This practice is referred to as market penetration.
Market penetration is said to occur when a firm entering into a market tries to become dominant by driving away its competitors.
A firm practicing Market penetration can cut prices in order to lure away customers from those firms that are overcharging them.
They can also use advertisements in order to keep their customers away from their competitors.
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