Exhibit 11-5
-Refer to Exhibit 11-5, which illustrates the profits in a duopoly game between firm A and firm B that is played only once. When the game reaches a Nash equilibrium, the profits are

Question

Exhibit 11-5 
-Refer to Exhibit 11-5, which illustrates the profits in a duopoly game between firm A and firm B that is played only once. When the game reaches a Nash equilibrium, the profits are

Quizplus · Accepted Answer

A Nash equilibrium occurs when each player's strategy is optimal given the other player's strategy. In this case, both firms choosing strategies that lead to profits of $750 for firm A and $650 for firm B represent a point where neither firm can improve their outcome by unilaterally changing their strategy, assuming rational behavior and knowledge of the other's strategy.

Exhibit 11-5 -Refer to Exhibit 11-5, Which Illustrates the Profits in a Profits