2. Pizza Hut is adding pasta salad to their menu and is trying to decide what...

 

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2. Pizza Hut is adding pasta salad to their menu and is trying to decide what price to charge; after it makes its decision, Domino's is going to decide whether to enter the pasta salad market as well. Use the decision tree to determine whether Pizza Hut should deter Domino's from entering the market for pasta salad. Which price should Pizza Hut charge? Assume that each firm must earn a 25% return on investment to break even. Explain Pizza Hut's decision process. Pizza Hut Decision: Charge High Price or Low Price $7.49 $4.99 Domino's Decision: Enteror Don't Enter Domino's Decision: Enteror Don't Enter Enter Don't Enter Enter Don't Enter Rates of Return Pizza Hut Domino's 28% 28% Rates of Return Pizza Hut Domino's 45% Rates of Return Pizza Hut Domino's 12% 12% Rates of Return Pizza Hut Domino's 30% 2. Pizza Hut is adding pasta salad to their menu and is trying to decide what price to charge; after it makes its decision, Domino's is going to decide whether to enter the pasta salad market as well. Use the decision tree to determine whether Pizza Hut should deter Domino's from entering the market for pasta salad. Which price should Pizza Hut charge? Assume that each firm must earn a 25% return on investment to break even. Explain Pizza Hut's decision process. Pizza Hut Decision: Charge High Price or Low Price $7.49 $4.99 Domino's Decision: Enteror Don't Enter Domino's Decision: Enteror Don't Enter Enter Don't Enter Enter Don't Enter Rates of Return Pizza Hut Domino's 28% 28% Rates of Return Pizza Hut Domino's 45% Rates of Return Pizza Hut Domino's 12% 12% Rates of Return Pizza Hut Domino's 30%

Answer rating: 100% (QA)

If pizza hut charges high price ie 749 and Dominos enter the market then they will both will earn ra... View the full answer