Question
Home Depot and Lowe's are in a price war on refrigerators. Refrigerators at Home Depot cost $1,000 with a price matching guarantee of a 10%
- Home Depot and Lowe's are in a price war on refrigerators. Refrigerators at Home Depot cost $1,000 with a price matching guarantee of a 10% rebate on the price difference with Lowe's, whose refrigerators cost $800. What is likely to happen in this market?O Home Depot and Lowe's will both price their refrigerators at the higher price, and that will become their dominant strategy.O Lowe's will capture all the customers because of its posted lower price.O Home Depot and Lowe's will share the customers evenly between them, although Lowe's will earn more profit.O Home Depot will capture all the customers because price is lower after the price matching guarantee and 10% rebate.
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