A Nash equilibrium is
A) reached when an oligopoly's market demand and supply intersect.
B) reached when each player chooses the best strategy for himself and for the group.
C) reached when each player chooses the best strategy for himself, given the other strategies chosen by the other players in the group.
D) an equilibrium comprising non-dominant strategies only.
Answer: C
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Bargaining costs are generally high in cases involving environmental externalities because:
a. there are strong incentives to be a free rider. b. many individuals may be affected by the externalities. c. it is difficult to measure the costs of the externalities. d. all of the above.
A decrease in the capital–labor ratio would result in: a. higher labor productivity because labor does more work
b. lower labor productivity because labor is working with relatively less capital. c. higher labor productivity because labor is producing less capital and more of other goods. d. lower labor productivity because more capital is available. e. higher labor productivity because more capital is available.
In the above table, the cross price elasticity of demand (using averages) for C with good A, when PAÂ increases from $12 to $15, is approximately equal to
A. +1.03 B. +0.44. C. -0.44. D. +2.26.
In the long run
A. the price level is independent of the level of output. B. the level of output is independent of the price level. C. price and output levels are mutually dependent. D. the level of output is depends on the price level.