Question

Walmart and Target are the only stores in a remote town that currently stock and sell the PlayStation 5 video game console. Managers at both stores are simultaneously deciding whether to charge a price of $1,000 or $1,500 for each console. If both stores charge $1,000, they earn a profit of $100,000 each. If both stores charge $1,500, they earn a profit of $200,000 each. If one store charges $1,000 and the other store charges $1,500, the store that charges $1,000 earns a profit of $250,000 and the firm that charges $1,500 earns a profit of $50,000. If Walmart and Target ________, they can both charge $1,500 and earn the highest combined profit available.

Answer 1

collude with each other

Step-by-step explanation:

A monopoly market structure is the structure in which the chances of high profit are there. In the case when the two firms and they work together so that the can extract the maximum profits and after that they shared themselves

As in the given question, in the case when Walmart and Target collude with each other so they would charge $1.500 and earned highest profit available

The same would be considered