Pricing strategies and economic profit

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Reference no: EM1315198

Many home improvement retailers like Home Depot and lowes have low-price guarantee polices. At a minimum these guarantees promise to match a rival's price, and some promise to beat the lowest advertised price by a given percentage. Do these types of pricing strategies result in cutthroat competition and zero economic profits? If so, suggest an alternative pricing strategy that will permit these firms to earn positive economic profits.

Reference no: EM1315198

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