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Use the Following Setup

Question 73

Multiple Choice

use the following setup
Consider a sequential game between a shopkeeper and a haggling customer.The party who moves first chooses either a high price ($50) or low price ($20) and the second mover either agrees to the price or walks away from the deal and neither party gets anything.Ignore costs and assume the customer values the item at $60.
-​Looking ahead at how the customer is more likely to react,what price should the shopkeeper charge?


A) ​High price
B) Low price
C) Offer the good for free
D) ​A compromised price between the high and the low price

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