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Question: If a business drops, its price will always increase demand and it will make more profit. Discuss this Statement. Answer: Minsky, H.P., 2015.Can" it" happen again?: Essays on instability and finance. Routledge. The various forces which help in determining the profitability are consumer preferences, market information and technology. The companies which are incurring huge profits has to break the rules and adapt the new pricing strategies. There are some companies which have the capability of implementation of various kinds of strategies in terms of business failure. It is important for the customers to understand the value of the products. When the revenue of an economy falls, it is important to understand that and take the appropriate actions accordingly. In an economy which is showing a very slow growth, it is reasonable to lower the price of the product so as to increase the profitability of the company. If the demand of a particular product is perfectly inelastic, buyers will purchase the same quantity of the goods at a much higher price. Whereas if the demand for the product is elastic, the customers will not be attracted if the retailers raise the price of the product. The prices of t he product are always sensitive and even if the firms falls to a much lower level. There will be decline in the average price of the product. It is likely that the demand for the product will increase when there will be price war. The advantages of falling prices over all other competitors are always temporary and short lived. The customers will set a particular expectation of the price and he/she will prefer the product keeping aside the price war. In case of business failure, the customers will be more attracted to a product which is available at a much higher price. The customers will prefer to buy the product because he/she will understand the benefits of the product keeping aside the price. This will help the business firm to increase its profit because the business firm will sell the product at a much higher cost than the normal situation. The business firm can sell the product at a much higher cost till the time the customer will perceive the benefits of the product. On most cases, it is seen that the company will fight on the price war as a part of the deliberate strategy. The companies will try to invest in new technologies and methods so that it can reduce the cost of production and sell the products at a profitable price. Kim, W. C., Mauborgne, R. A. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press. The growth has always been experienced in the company that is in their declining state. This is one of the shocking incidents that have been evident over the years. This growth is evident because of the use of traditional strategic planning result that was supposed to give a limited growth experience. It has been seen that the declining industries does not focus on competition like the prospering industries. Their main motto has always been to fight competition without trying to defend the competitive market. The declining business main aim will be clear off the sale at that crucial point of time rather than focusing on competition. This is because, if it aims to clear off the stock then in future t can make plans to increase its operation in a better way. Moreover, clearing off the sale means offering the goods to the customer at a lower rate. Thus, this will increase their demand for the goods at that price as the customers will buy more at a less price compared to other companies selling same products. This will add to the marketing of the company in the long run and customers buying products at a less price now will use the product and get aware about the company and the quality they sale. Thus by clearing the sale the company gets an opportunity to improve its marketing techniques in front of its customers. The improved image of the declining company in front of the customers will help the company to overcome from the declining state. On the other hand, when the company will be in its recovering stage this selling technique will e beneficial for it to increase demand. Customers will be aware of the products and might demand products more than before. Thus, a declining business can use this tactics to increase its profit in future. The only thing that the company should keep in mind is that it has to forget its competitors in this situation and just focus on increasing its own demand. Operation improvement and future market expansion should be the only aim of the company at its declining stage. References Kim, W. C., Mauborgne, R. A. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press. Minsky, H.P., 2015.Can" it" happen again?: Essays on instability and finance. Routledge. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.