price competition


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price competition

see COMPETITION.

price competition

a form of rivalry between suppliers that involves an attempt to win customers by offering a product at a lower PRICE than competitors. Price competition is especially beneficial to consumers insofar as it results in the establishment of prices that are consistent with the real costs of supplying the product and serves to improve the RESOURCE ALLOCATION efficiency of the market by eliminating inefficient, high-cost suppliers (see PERFECT COMPETITION). From the suppliers’ point of view, price competition is often something to be resisted because it reduces the profitability of the market, and, where conditions permit (for example, OLIGOPOLY), suppliers may attempt to avoid price competition. See PRICE LEADERSHIP, PRICE PARALLELISM, COLLUSION, COMPETITION METHODS.
References in periodicals archive ?
But the commissioners said Qwest had failed to establish that there is price competition, and deregulation would be likely to bring higher prices.
The company argues that the price mechanism which mobile carriers use to set prices for fixed-line-to-mobile calls breaks the antitrust law because it blocks fair price competition and forces callers to pay higher prices.
As this is accomplished, three benefits will follow: (1) price competition at the point of service, (2) abundant cost and outcomes information, and (3) greatly reduced administrative burdens.
We do not accept that this form of price competition is largely confined to telephone betting.
Today's would-be reformers charge just the opposite: that individuals are deprived of a choice because intense price competition relegates them to restrictive HMOs.
That approach continues to this day, allowing the major airlines to limit price competition among themselves-even on routes where they do go head-to-head.
Managed competition proponents argue that their model offers real price competition by organizing providers and consumers into coherent units.
The price competition in the market today, while expected to continue indefinitely, is not as drastic as what occurred from 1985 through 1987.
Contrary to popular belief, MNP does not necessarily increase long-term churn or cause price competition.
This segment includes several large volume products, such as plasticizers, which are experiencing severe price competition.
Close working relationships, intense price competition, near-zero defects and service excellence has long been expected.
If entrepreneurism is the proxy for competition in health care, if price competition is the anecdote for rising costs, if government fiscal policy precludes equitable payment for the care it has promised, who will purchase care for the uninsured?