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lbelcher lbelcher
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4 years ago

Table 14-2



Table 14-2 shows the payoff matrix for Wal-Mart and Target from every combination of pricing strategies for the popular PlayStation 4. At the start of the game each firm charges a low price and each earns a profit of $7,000.



Refer to Table 14-2. Suppose Wal-Mart and Target both advertise that they will match the lowest price offered by any competitor. What is the purpose of such a strategy?



▸

to signal to each other not to charge below the current low price



▸

to signal to each other that they intend to charge the high price



▸

to signal to each other that they will not hesitate to initiate a price war



▸

to signal to each other to share the market equally

Textbook 
InMicro

InMicro


Edition: 1st
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jrhome1985!jrhome1985!
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lbelcher Author
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4 years ago
Thanks
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