A Company Introduces a New Product in the Market

Multiple Choice

A company introduces a new product in the market. The company decides that the only way it could attract customers is to keep the price of the product lower than what its competitors charge. Which of the following disadvantage would the company face because of the strategy it proposes to follow?

A) Low prices for goods and services always lead to low customer base for the company.
B) Downplaying research and development can slow the company's ability to respond to changes once they are detected.
C) The company's strategy would make it vulnerable to price competition from rivals.
D) The company's strategy would break down barriers to entry that protects the firm from new competition.
E) The presence of such a company would have the effect of discouraging new firms from entering the business.