Read the article “Competition and pricing” and suppose that you are the manager of a convenience store in a suburban neighborhood. Your location is on the corner of a major intersection with two other convenience stores located on opposite corners. All of the stores, including yours, sell the same types of convenience products, including gas. The main point of differential is the brand name of the convenience stores, with yours being the market leader.

Answer the following three questions: would it or would it not be feasible for you to engage in a price war with your competitors? Why? How would you react in a price war?