Question: Two Grocery Stores serve a defined market provided market research, the two firms have determined that their profit potential is served by either developing a product mix directed at one of three possibilities. The first is the general grocery products that are discounted and attempt for volume. The second is to sell high end meats and produce. The third is to feature organic products.

The following matrix depicts the payoffs to these two stores, when they develop different combination of appeals toward different customer bases. This is an oligopoly market with full information.

Firm 2

High Volume High End Meats and Produce Organic

High Volume ?_? = 0 ?_?= 0 ?_? = 1 ?_?= 2 ?_? = 2 ?_?= 1

Firm 1

High End Meats and Produce ?_? = 4 ?_?= 2 ?_? = 2 ?_?= 3 ?_? = 4 ?_?= 2

Organic ?_? = 5 ?_?= 1 ?_? = 3 ?_?= 2 ?_? = 3 ?_?= 0

a. Given the attached matrix, which choice would each Firm make?