Refer to the following figure showing the reaction functions of oligopoly firms A and B.

-In Nash equilibrium,

Name: Refer to the following figure showing the reaction functions of oligopoly firms A and B. -In Nash equilibrium,
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Question

Refer to the following figure showing the reaction functions of oligopoly firms A and B.
 
-In Nash equilibrium,

Quizplus · Accepted Answer

In Nash equilibrium, each firm chooses its strategy to maximize its profit, taking into account the strategy of the other firm. In this case, firm A runs 4 ads and firm B runs 7 ads because this is the combination of strategies that gives each firm the highest profit.

Refer to the Following Figure Showing the Reaction Functions of Oligopoly