Suppose the two supermarkets Waldnaum\'s and Pathmark are in a price war, each c
ID: 3251117 • Letter: S
Question
Suppose the two supermarkets Waldnaum's and Pathmark are in a price war, each can decide to have a 10% discount, a 20% discount or a 25% discount on soda. Waldbaum's figured the customer gain in each scenario as: (Find attached)
Suppose Waldbaum's knows that Pathmark will have an 80% chance of running a 20% discount and 10% chance of runnin the 10% and also the 25%, what should Waldbaum's do and how many customers will it gain?
(3) Suppose the two supermarkets Waldbaum's and Pathmark are in a price war, each can decide to have a 10% discount, a 20% discount or a 25% discount on soda. Waldbaum's figured the customer gain in each scenario as: 10% 20% 25% 10% 10 50 -100 20% 70 10 -30 25% 80 20 5 Suppose Waldbaum's knows that Pathmark will have an 80% chance of running a 20% discount and 10% chance of running the 10% and also the 25% discount, what should Waldbaum's do and how many customers will gain? itExplanation / Answer
As Waldbaum knows that Pathmark will have 80% chance of running 20% discount . At this state, Waldbaum can give 10%,20% & 25% discount, As a result , they may have 50 , 10 customers losses & 20 customers gain.
As far as possible , then Waldbaum can give 25% discount to have 20 customers gain.
Furthermore , there is less chance of Pathmark to give 10% & 25% discounts each with the probability 10%.
Therefore , Waldbaum will try to give 25% discount if Pathmark will be giving 10% discount, to have the gain of customers to be 80. At this state if Walbaum will try to give 25% discount as well Pathmark to 25% discount then there will be the loss of 5 customers.
As far as possible Waldbaum will give 25% discount.
Then expected gain will be = 0.1*0.25*80 + 0.2* 0.25 *20 +0.25*0.25*(-5) = 2+1 - 0.3125 = 2.6875 ~ 3 customers gain
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