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Homework answers / question archive / Guaranteed price matching, which occurs when a firm announces that it will automatically match any competitor's price is: a) Good for consumers because it keeps prices low, b) Bad for consumers because it keeps prices high, c) Does not affect consumers since it does not actually affect the price of the product
Guaranteed price matching, which occurs when a firm announces that it will automatically match any competitor's price is:
a) Good for consumers because it keeps prices low,
b) Bad for consumers because it keeps prices high,
c) Does not affect consumers since it does not actually affect the price of the product.
Usually, a firm can lower the price with the view of increasing its customer base. However, under guaranteed price matching, a firm is unlikely to cut its price because other firms will equal the price cut. Because of this behavior, the price is likely to remain high and hence disadvantaging the consumers.
