Right now, AMD can't afford a price war. The price drop will probably be on the Athlon X2's or prices to OEM's for B2's. The retail prices will probably stay the same. Intel does not have to drop prices. They did their price war prior to Phenom's arrival and nothing AMD has out warrants another price war.
One thing that always gets me, is that people act like AMD should be around just to keep the prices of their Intel CPU's low. That's not how competition works. AMD's market share is lower than at their best with the Athlon X2 and AMD's performance, while good for OEM's and budget builds, does not compete well enough with Intel's new offerings to lead Intel to drop prices to gain more market share.
Could Intel drive AMD out of business with a price war? Probably, but it would be bad business. They're keeping AMD at a market share Intel can live with while making a profit. Keep in mind that Intel's had layoff too and competes in far more areas than desktop CPU's. Their biggest "opponent" is Samsung, not AMD.