5. The following matrix shows the strategies of At & T and Verizon for charges f

Question

5.
The following matrix shows the strategies of At & T and Verizon for charges for long distance calls. The payoff matrix shows the profits each makes in millions of dollars. Read the table for Verizons' strategies column-wise and A T & T's strategies row-wise. Suppose Verizon and AT&T can each charge 40 cents and 30 cents a minute for long distance calls. Verizon's dominant strategy is to charge ----- and AT&T's dominant strategy is to charge -----.



Verizon's pricing strategies
A T & T 40 cents 30 cents
Pricing 40 cents
V: $450

A: $450

V: 500

A: $200

Strategies 30 cents
V: 200

A: $500

V: $300

A: $300



A) 30c, 30c
B) 40c, 30c
C) 40c, 40c
D) 30c, 40c

Explanation / Answer

A) 30c, 30c.

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