What is demolition price?

Break-up Price: A break-up price refers to an extremely low price, often even lower than the cost price of a product. This is also known as a dumping price. The goal of a break-up price can vary, but it is often used to increase market share or to get rid of excess stock. The use of break-up prices can lead to a negative price spiral in the market, where competitors are forced to lower their prices too, which can result in price erosion.

Example: In the shipbuilding industry, South Korea sold its ships at break-up prices to increase its market share, which led to fierce competition in the sector.