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Table 9-2 Wal-Mart's (W) Choices High Price Low price W: $10.000 profit W: $5,000 profit High Price Target's (T) T: $10,000 profit T: $14,000 profit
Table 9-2 Wal-Mart's (W) Choices High Price Low price W: $10.000 profit W: $5,000 profit High Price Target's (T) T: $10,000 profit T: $14,000 profit Choices W: $14,000 profit W: $7.000 profit Low price T: $5,000 profit T: $7.000 profit Table 13-2 shows the payoff matrix for Wal-Mart and Target from every combination of pricing strategies for the popular PlayStation 5. At the start of the game each firm charges a low price and each earns a profit of $7,000. Refer to Table 9-2. 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? O to signal to each other that they intend to charge the high price O to signal to each other to share the market equally O to signal to each other that they will not hesitate to initiate a price war O to signal to each other not to charge below the current low price
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