price war

noun
Updated on: 15 Nov 2017

Definition of price war

: commercial competition characterized by the repeated cutting of prices below those of competitors

Examples of price war in a Sentence

  1. The airlines are engaged in another price war.

Recent Examples of price war from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'price war.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of price war

1895


Financial Definition of PRICE WAR

price war

What It Is

A price war is an event whereby two or more companies continually lower prices to undercut each other.

How It Works

Airline companies are famous for their price wars. If Airline XYZ cuts the price of a flight from Los Angeles to New York from $800 to $700, Airline ABC, which is competing for business on that route, might cut its fare to $650. Airline XYZ might respond by lowering its fair to $625, and so on.

Why It Matters

Engaging in a price war is a competitive strategy, usually to capture market share. Falling prices tend to attract more customers. Some companies may choose to sell a product or service at a loss, however, in order to capture market share and outwin competitors. In some cases, this might lead to antitrust violations.


PRICE WAR Defined for English Language Learners

price war

noun

Definition of price war for English Language Learners

  • : a situation in which companies or stores compete with each other by lowering their prices on goods or services in order to attract more customers


Seen and Heard

What made you want to look up price war? Please tell us where you read or heard it (including the quote, if possible).

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!

WORD OF THE DAY

an inference not connected logically

Get Word of the Day daily email!

Test Your Vocabulary

Find the Cousins

  • a-large-tree-with-many-branches
  • Which pair shares a common word ancestor?
Name That Thing

Test your visual vocabulary with our 10-question challenge!

TAKE THE QUIZ
Bee Cubed

Test Your Knowledge - and learn some interesting things along the way.

TAKE THE QUIZ

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!