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10 January, 19:21

Merv's Hardware, a small family-owned store in Middletown, sells a 100-pack of garnet sandpaper for $35. The Home Shoppe, a large retail hardware chain in neighboring Morristown, sells the same product for $29. Based on this scenario, what would you expect Merv's immediate response to be?

A. Merv will remove his advertisements and rely on word of mouth.

B. Merv will reduce his price to respond to the price competition from the HomeShoppe.

C. The HomeShoppe will initiate non-price competition with Merv.

D. The HomeShoppe will raise its price to respond to the price competition from Merv

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  1. 10 January, 20:24
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    B. Merv will reduce his price to respond to the price competition from the HomeShoppe.

    I would say B in this case as it's the only option that satisfies the "immediate" demand that makes sense.
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