A best response function:
A)is a strategy that provides the most profit given the strategy of the other firm.
B)is a strategy that provides the most profit given the profit of the other firm.
C)is a strategy that punishes other firms for not cooperating.
D)is a strategy that always provides the most profit to a firm.

Question

Quizplus · Accepted Answer

A best response function is a strategy that a firm chooses in response to the strategy of its competitor, which provides the highest possible profit for the firm given the strategy of its competitor. It is not a strategy that always provides the most profit to a firm, nor is it a strategy that punishes other firms.

A Best Response Function