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Ken Garrett.
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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › Cost leadership
Sir in case of cost leadership, does the company compete with its rivals at the same market price as is in the industry(and aims to maximise profits),
OR does it use its lowest cost advantage to further reduce the price, and focus on maximising sales volume?
Strictly, cost leadership allows a company to make good profits at the current market price. In practice low cost producers will probably lower sales prices to put pressure on their less efficient rivals.