Asus

-Dell and Asus must decide whether to lower their prices, based on the potential economic profits shown in the payoff matrix above (in millions of dollars). In the Nash equilibrium,
A) both Dell and Asus lower prices.
B) both Dell and Asus keep prices high.
C) Dell keeps its prices high and Asus lowers its prices.
D) Asus keeps its prices high and Dell lowers its prices.

Question

Asus
 
-Dell and Asus must decide whether to lower their prices, based on the potential economic profits shown in the payoff matrix above (in millions of dollars). In the Nash equilibrium,
A) both Dell and Asus lower prices. 
B) both Dell and Asus keep prices high. 
C) Dell keeps its prices high and Asus lowers its prices. 
D) Asus keeps its prices high and Dell lowers its prices.

Quizplus · Accepted Answer

In a Nash equilibrium, each player's strategy is optimal given the strategy of the other player. If both Dell and Asus lowering prices results in a higher payoff for each compared to the other scenarios, then both will choose to lower prices.

Asus -Dell and Asus Must Decide Whether to Lower Their Prices