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lbelcher lbelcher
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Posts: 344
A week 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

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jrhome1985!jrhome1985!
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Posts: 307
A week ago
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to signal to each other that they intend to charge the high price

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