A low-cost price leader could enforce its leadership through implied threats to a rival by increasing production at a lower operating cost. Let's say a manufacturer can increase it's output by 40% while only increasing operating costs by 10%. The low-cost price leader could then say they have the ability to over saturate the market with their product while still keeping a lower price. This would be most effective in a oligopoly, where the competition is limited and the market is shared. An example of an oligopoly would be your local cable companies, where in this example one company could build up infrastructure to support a larger area allowing them to bring in more customers. If the company can bring in more customers while keeping operating costs roughly the same, they can keep the price low and take over the market. Using the knowledge of being able to expand while keeping prices low, that cable company can prevent other companies from lowering prices in competitive areas with vague threats of expansion with superior service and lowers costs.
We are a professional custom writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework.
Yes. We have posted over our previous orders to display our experience. Since we have done this question before, we can also do it for you. To make sure we do it perfectly, please fill our Order Form. Filling the order form correctly will assist our team in referencing, specifications and future communication.
1. Click on the “Place order tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
2. Fill in your paper’s requirements in the "PAPER INFORMATION" section and click “PRICE CALCULATION” at the bottom to calculate your order price.
3. Fill in your paper’s academic level, deadline and the required number of pages from the drop-down menus.
4. Click “FINAL STEP” to enter your registration details and get an account with us for record keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
5. From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.
Need help with this assignment?
Order it here claim 25% discount
Discount Code: SAVE25