A Nash equilibrium occurs when
A)supply equals demand.
B)no firm expects an increase in profits by changing its business strategy unilaterally.
C)all firms maximize profits.
D)all firms minimize costs.
E)no one is better off without making another individual worse off.

Question

Quizplus · Accepted Answer

A Nash equilibrium occurs when no firm expects an increase in profits by changing its business strategy unilaterally. This means that each firm is maximizing its profits given the actions of the other firms, and there is no incentive for any firm to deviate from its strategy, as doing so would result in lower profits.

A Nash Equilibrium Occurs When