Cutter Company and Pristine Corporation compete in the same industry. Pristine has embarked on a quality campaign, and Cutter company has seen its market share fall in the face of this. Cutter's management has decided to adopt a new strategy of pricing more aggressively while maintaining current quality levels, and emphasizing availability. What effect would you expect this strategy to have on Cutter's gross profit margin?

1. Gross profit margin will decrease

2. Gross profit margin will be unaffected by this change

3. Gross profit margin will increase

4. Gross profit margin will increase if sales rise and decrease if sales fall

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Answer 3 Gross profit ... View the full answer