Price competition is minimized when all firms in an industry use which pricing method?elasticity…

➤ Why do elasticity pricing or variable pricing encourage stronger price competition?
Elasticity or variable pricing adjusts prices based on demand sensitivity, time, or segments. Firms often lower prices to capture volume during weak demand, which can trigger reciprocal cuts by rivals. That dynamic increases price transparency and short-term undercutting, amplifying price competition instead of long-term differentiation.