Target Executives Believe That If They Raise Prices, Then Customers

question 301

Multiple Choice

Target executives believe that if they raise prices, then customers will switch to shopping at Walmart across the street. However, if they decrease their prices, then Walmart will respond by decreasing their own prices, with no customers switching from Walmart to Target. This scenario implies that

• A) Target should decrease its prices in an effort to drive Walmart out of business.
• B) prices charged by both retailers will be relatively stable.
• C) both retailers are locked in destructive competition.
• D) Target should not have a pricing strategy.

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Definitions:

Retributive Justice

The fair use of punishment.

Human Right

A right that is believed to belong justifiably to every person, including basic freedoms and protections, irrespective of their nationality, sex, ethnic origin, color, religion, language, or any other status.

Tortured

Subjected to severe physical or emotional pain or suffering.

Social Function

The role or contribution of an activity, behavior, or institution toward the maintenance and stability of a society.