Which statement most nearly describes a Nash equilibrium applied to price competition?
A) Two firms cooperate and set the price that maximizes joint profits.
B) Each firm automatically moves to the purely competitive equilibrium because it knows the other firm will eventually move to that price anyway.
C) Given the prices chosen by its competitors, no firm has an incentive to change their prices from the equilibrium level.
D) One dominant firm sets the price, and the other firms take that price as if it were given by the market.
C
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Headquartered in Washington, D.C., the Board of Governors of the Federal Reserve determines monetary policies and strategies based on the state of the economy
Indicate whether the statement is true or false
What is a normal profit? Is it part of the firm's opportunity costs, total revenue, or neither?
What will be an ideal response?
When taxes paid by a check are deposited in tax and loan accounts,
A) bank reserves and the money supply are unaffected. B) bank reserves fall but the money supply is unaffected. C) bank reserves are unaffected but the money supply falls. D) bank reserves and the money supply fall.
Free trade policies may lead to
A) a decrease in world output. B) price increases in world markets. C) some labor sectors experiencing some short-term job loss. D) none of the above.