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Strategy for a camera shop.

Price comparison services on the Internet (as well as œshopbots) are a popular way for retailers to advertise their products and a convenient way for consumers to simultaneously obtain price quotes from several firms selling an identical product. Suppose that you are the manager of Digital Camera, Inc., a firm that specializes in selling digital cameras to consumers that advertises with an Internet price comparison service. In the market for one particular high-end camera, you have only one rival firm . The Camera Shop with whom you have competed for the last four years by setting prices day after day. Being savvy entrepreneurs, the ease of using the Internet to monitor rival firms prices has enabled you and your rival to charge extremely high prices for this particular camera. In a recent newspaper article, your read that the Camera Shop has exhausted its venture capital and that no new investors are wiling to sink money into the company. As a result, The Camera Shop will discontinue its operations next month. Will this information alter your pricing decisions today? Explain.

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