Bagels RUS is expanding into a high-growth suburban area.To promote business and lure customers from the competing Wer Bagel store, they are considering offering a free dozen bagels to the first 50 customers or radio advertisement.The payoff for Bagels RUS is given in the table below.What is Wer Bagels' (Y)best strategy? A)X₁ B)X₂ C)Y₁ D)Y₂

Question

Quizplus · Accepted Answer

If Bagels RUS offers a free dozen bagels to the first 50 customers, Wer Bagels' best strategy would be to match or improve the offer to retain their customers. Therefore, Wer Bagels should offer a free dozen bagels to the first 50 customers as well (Y = 1). However, offering more than a dozen bagels may not yield better results, as it would increase costs without necessarily attracting more customers. Thus, Wer Bagels should offer only one dozen bagels for free (S1 = 1, U1 = 1, B11 = 1). Therefore, the best strategy for Wer Bagels would be option C (Y₁).

Bagels RUS Is Expanding into a High-Growth Suburban Area