Table 14-2 Table 14-2 Shows the Payoff Matrix for Walmart and Target

question 170

Multiple Choice

Table 14-2

Table 14-2 shows the payoff matrix for Walmart 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 Walmart and Target both advertise that they will match the lowest price offered by any competitor.What is the purpose of such a strategy?

• A)to signal to each other not to charge below the current low price
• B)to signal to each other that they will not hesitate to initiate a price war
• C)to signal to each other that they intend to charge the high price
• D)to signal to each other to share the market equally

---

Definitions:

Malnourished

A state where a deficiency, excess, or imbalance of energy, protein, and other nutrients causes measurable adverse effects on tissue/body form (body shape, size, and composition) and function.

Chemotherapy

A type of cancer treatment using drugs to destroy cancer cells, often by inhibiting their growth and division.

Taste Buds

Sensory organs located on the tongue that allow us to perceive different tastes.

Perilymph

The fluid located within the labyrinth of the inner ear, playing a crucial role in hearing and balance.