Cut-throat competition

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Cut-throat competition, also known as destructive or ruinous competition, refers to situations when competition results in prices that do not chronically or for extended periods of time cover costs of production, particularly fixed costs. This may arise in secularly declining or "sick" industries with high levels of excess capacity or where frequent cyclical or random demand downturns are experienced.[1]

[edit] See also

[edit] References

  1. ^ Khemani, R. S.; Shapiro, D. M. (compilers) (1993). Glossary of Industrial Organisation Economics and Competition Law (pdf). Directorate for Financial, Fiscal and Enterprise Affairs, OECD. Retrieved on November 13, 2006.
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