Suppose that George and Laura are duopolists.George is producing 300 units of output,and Laura is producing 400 units of output.When Laura produces 400 units,George maximizes profit by producing 300 units.When George produces 300 units of output,Laura maximizes profit by producing 400 units.George and Laura are

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The situation described is a classic example of a Nash equilibrium in a duopoly. Both firms are producing the output level that maximizes their profits given the output level chosen by the other firm. Neither firm has an incentive to deviate from their chosen output level, making it a stable outcome.

Suppose That George and Laura Are Duopolists