(Answered) Coles and Woolworths are Australia’s two largest supermarkets. Recently they have faced new,…

➤ How does playing a dominant strategy lead supermarkets to worse outcomes?
A dominant strategy is the best response regardless of the rival’s move. If price cutting is dominant for each firm, both choose it to avoid losing customers. The resulting Nash equilibrium leaves them worse off than if they had cooperated, producing a Pareto‑inferior outcome despite rational choices.