2) Competition based pricing. This will be helpful for sellers who are wanting to break through a market. If a market is highly competitive, you might want to sell your goods for a lower price to attract more customers to you. It can help you get customers but you might not be able to get as much profit due to low pricing.
This kills the other competitors. And the ones that stays on the competition is able to dictate the market when they're able to eliminate most of the competitors that they are dealing with. But I wouldn't encourage to stay low in prices just to win the customers. If you've got an MVP product or service, there is no need to decrease it because you and the competitors are going to be mostly the victims here while the consumer wins. Well, as a consumer that's fine but this is the quickest way to go out of business when prices are forcefully decreased just for that sake to survive.