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MAINTAIN OR BREAK COOPERATIVE EQUILIBRIUM Now that you have resolved the contract issue with Brixmortar, you can move on to the final issue you want

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MAINTAIN OR BREAK COOPERATIVE EQUILIBRIUM Now that you have resolved the contract issue with Brixmortar, you can move on to the final issue you want to resolve before dealing with GN-Tech. You and your biggest rival, MDCO Inc., have been engaging in a repeated game in the market for blood pressure medication. Both ELX Labs and MDCO Inc. have tacitly agreed to a price for their respective medications that has held steady over time, increasing and decreasing slightly in relation to specific market pressures. The price of ELX Labs' medication always moves in line with MDCO Inc. and vice versa. Likewise, both companies have tacitly agreed to alternate rebate periods for the purchase of the drug. MDCO Inc. will offer a rebate one sales quarter, and ELX Labs will do so the next. This cooperative equilibrium has proven lucrative for both companies in the past, but times change. The threat of GN-Tech in the cholesterol market has some in your company saying you should rethink your strategy in the blood pressure market. What do you think the best move is now for ELX Labs with regard to its relationship with MDCO Inc. in this market? Select an option from the choices below. Signal to MDCO Inc. that you have every intention of maintaining the cooperative equilibrium in the blood pressure medication market. Change the game with MDCO Inc. by dramatically undercutting its prices and offering rebates during quarters when MDCO Inc. typically does. Change the game, but in a more moderate way; by maintaining the tit-for-tat relationship with rebates, but undercutting MDCO Inc.'s prices overall

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