• Home Depot and Lowe's are in a price war on refrigerators. Refrigerators at Home Depot cost $1,000 with a price matching guarantee of a 10% rebate on the price difference with Lowe's, whose refrigerators cost $800. What is likely to happen in this market?

  O Home Depot and Lowe's will both price their refrigerators at the higher price, and that will become their dominant strategy.

  O Lowe's will capture all the customers because of its posted lower price.

  O  Home Depot and Lowe's will share the customers evenly between them, although Lowe's will earn more profit. 

  O Home Depot will capture all the customers because price is lower after the price matching guarantee and 10% rebate.

  
  

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