ATHENS — In her upscale three-story beauty salon in a middle-class suburb of Athens, Doria Tsirigotis used to charge 30 euros for a haircut. But when a wrenching recession set in, her competitors started cutting their prices, first to 20 euros, then to 10 and even as low as 5 — or less than $7.

Ms. Tsirigotis tried to resist discounting her prices. But as her clients lost jobs or had their wages cut, she eventually lowered her rates. Soon, revenues dwindled and her debts mounted, and she had to let go of all but two of her 13 employees. Last month, she downsized to a tiny salon across the street, renamed Cheap ‘N’ Chic — more fitting to the times.

“When prices fall so much, you can’t not follow the trend,” Ms. Tsirigotis said, gazing at the now-darkened beauty boutique she ran for 20 years. “But in such an environment, no one wins.”

While consumers welcome lower prices, economists are worried that an outbreak of ultralow inflation across the 18-nation euro zone is doing more harm than good to the bloc’s economic recovery.