What environmental conditions are price wars likely to occur in an industry?

Price wars are likely to occur in industries characterized by high competition, excess supply, and low product differentiation. When companies face stagnant or declining demand, they may resort to aggressive pricing strategies to attract customers and increase market share. Additionally, industries with low entry barriers often see new entrants who may undercut prices, further intensifying competition. Lastly, economic downturns can exacerbate these conditions, prompting businesses to lower prices to maintain sales volume.