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 The retailer, even if he is not inclined to buy the line that
has been quoted at $7.50 a dozen cr sometimes at '7.25 a dozen, uses
these prices nevertheless to break down the price lines quoted at
$7.75 a dozen. The quotilig of a price cf $7.50 a dozen or $7.25 a
dozen by this small number cf manufacturers, creates a price war
between the manufacturers. 'The lower prices must soon be met by
other manufacturers. The price of 07.75 a dozen, at which price
fifty manufacturers have built their lines, in which they are giving
the best value they can afford to give with only a minimum of profit
added, is immediately destroyed.

 If these manufacturers continue tc sell tie same lines at the
lower prices they built to sell at $7.75 a dozen, the difference in
prices usually is enough to offset their margin of profit. If they
discard their lines and make un new lines to meet the lower rice levels,
they must do so at a complete loss of their investment in time, materials
and labor. The chances are, after they have made un the new lines to
meet the lower price levels, the manufacturers who are engaged in this
price war competition will again lower their prices. The whole practice
is a vicious one, with the nct result that neither manufacturers nor
retailers make a profit. The large number of failures amongst the manu-
facturers in the industry each year will bear evidence of the results
of this destructive price competition.

 Price groupings will establish -orice levels, and -orevent destruc-
tion of profits in the industry.









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