Table 14-8 Two Rival Oligopolists in the Athletic Supplements Industry, the Power

question 195

Multiple Choice

Table 14-8

Two rival oligopolists in the athletic supplements industry, the Power Fuel Company and the Brawny Juice Company, have to decide on their pricing strategy.Each can choose either a high price or a low price.Table 14-8 shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts.
-Refer to Table 14-8.If the firms act out of individual self-interest, which prices will they select?

• A)Both firms will select a high price.
• B)Brawny Juice will select a high price, Power Fuel will select a low price.
• C)Brawny Juice will select a low price, Power Fuel will select a high price.
• D)Both firms will select a low price.

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Definitions:

Product Availability

The extent to which a product can be purchased or obtained at the time a customer is ready to buy.

Bullwhip Effect

A phenomenon in supply chains where small fluctuations in consumer demand cause progressively larger fluctuations in demand at wholesalers and manufacturers.

Boom And Bust Cycles

Economic phases characterized by periods of rapid expansion (boom) followed by periods of decline (bust), often due to supply and demand imbalances.

CPFR

Collaborative Planning, Forecasting, and Replenishment is a business practice where trading partners use joint business planning and a shared forecast to optimize supply chain efficiency.