Table 14-4 Alpha and Beta Are the Only Firms Selling Gyros in Only

question 233

Multiple Choice

Table 14-4

Alpha and Beta are the only firms selling gyros in the upscale town of Delphi. Each firm must decide on whether to offer a discount to students to compete for customers. If one firm offers a discount but the other does not, then the firm that offers the discount will increase its profit. Table 14-4 shows the payoff matrix for this game.
-Refer to Table 14-4.Does Alpha have a dominant strategy and if so, what is it?

• A)Yes, Alpha should offer a student discount.
• B)Yes, Alpha should not offer a student discount.
• C)There are two dominant strategies: if Beta offers a student discount then Alpha's best bet is to not offer a student discount, but if Beta does not offer a student discount then Alpha should offer a student discount.
• D)No, there is no dominant strategy.