Circumstances like these get people talking about the cost of living and how expensive everything is. And that translates into many business peoples’ minds into a notion that the only way they’re going to get ANY business is by offering their market “the best price”. They believe that if they don’t offer the best price . . . they’ll go out of business.
Another popular reaction to a price drop by a competitor, is to drop the price to match. .
When asked of the way to increase volumes of sales, its not unusual for the knee jerk reaction to be “we’ll drop the price.”
But commonsense contradicts our using price as the panacea.