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sionpriceelasticityisrelativelysmall.Butforthemajorityoflowinefamiliesandruralconsumers,thehighpriceofcolortelevisionwillmakethemstepback.? ForthecolorTVproductionenterprises,thepricesofcolorTVsedownwillmakeenterpriseincuraloss,reducetheprofitsinsurface.Howeverappropriatepricelowerisusefultostartthemarketing,wemustadmitthatit’susefultoenterprises.? Fromthesocialpointofview,inordertorealizethemaximizationofsocialbenefit.Governmentmustkeepthesocialeconomiclifeinnormaloperation,tokeepthebalancebetweensupplyanddemandinmarket.Itmeansthatallproducersofmanufacturedgoodscanbebasedonthecurrentpriceclearing,andallarewillingtopurchasepricebuyerscanmeettheirdemand.Positive Impact It’susefultorealizethesurvivalofthefittestthrough“pricewar”.Wecaneliminatesomeextensiveandinefficiententerprisesinthe”pricewar”,it’soneoftheeffectivewaystoachievetheoptimalallocationofsocialresources. Improvetheeconomiesofscaleofhouseholdelectricalapplianceenterprisesthroughthepricewar”.Thelargescaleproductioncanproduceeconomiesofscale,lowerproductioncostsperunitofproductwhichhasagreatcontributiontoChina39。shouseholdelectricalapplianceenterprisestoreducethepriceoftheproduct. ThroughPricewartoexpandthesizeofthehomeappliancemarketNegative Impact:? price war weakens the ability of the accumulation of household electrical appliance enterprises. They are detrimental to the innovation, to interfere with development potential.? Price war easily leads to rivals follow suit, leading to a vicious petition, disrupt trade order.? Price war makes part of the home appliance product quality and aftersales service be difficult to get guarantee and it may damage the interests of customers.? The frequent pricecutting, will destroy the brand image of the product.Two Examples:VSAfter1996,becauseofthewrongstrategicoptionsChanghongadoptedtopetebymonopolizetheteletube(電視顯像管 )insteadofinnovatethenewproductsitwasexhaustedtodealingwiththepricewar.SoChanghongbegantogodownhill.? SkyworthistheonlyprivateenterpriseamongthoseColorTVgiants.Duringthepricewar,it’sbadmanagementmadeitswinginthemarketatthattime.ButsinceSkyworthhasadheredtothetechnologicalinnovationasenterpriseconstantlyprogresseternalpower,Skyworther(創(chuàng)維人,純屬自造 )paidarduousefforts,Afteradevelopmentof24years,SkyworthhasgrowntobeoneofthetoptencolorTVbrandsintheworldandatopbrandinChina’sdisplayindustryandwasranked14thamongthetop100electronicsChina.SkyworthEvolutionforecastofColorTVIndustries? LED (LightEmittingDiode發(fā) 光二 級(jí) 管 )goesfaster,itwilltakeove