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anhsu anhsu
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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. For each firm, is there a better outcome than the current situation in which each firm charges the low price and earns a profit of $7,000?



▸

Yes, the firms can implicitly collude and agree to charge a higher price.



▸

No, any other strategy hurts consumers.



▸

No, there is no incentive for each firm to consider any other strategy.



▸

Yes, each firm can implicitly agree to increase output and not to deviate from a low price.

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InMicro

InMicro


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Antoinette12Antoinette12
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