Get Solutions for: AT& T and MCI are competing in the long- distance

AT& T and MCI are competing in the long- distance telephone market. Both companies are considering whether to offer a discount calling plan to attract new customers. Their payoffs depend as follows on the combinations of strategies chosen: If both companies offer discount calling plans, then each company loses $8 million. If AT& T offers a discount calling plan and MCI does not, then AT& T makes a profit of $15 million and MCI suffers a loss of $12 million. If MCI offers a discount calling plan and AT& T does not, then MCI makes a profit of $5 million and AT& T suffers a loss of $6 million. If neither company offers a discount calling plan, each makes a profit of $6 million. Which of following statements is true? a. The dominant strategy for AT& T is to offer a discount calling plan. b. Only one Nash equilibrium pair of strategies exists. c. If AT& T offers a discount calling plan, the best strategy for MCI is not to offer a discount calling plan. d. This game is a prisoner’s dilemma. e. None of the above statements is true.