When both firms have dominant strategies
A)the outcome is called a dominant strategy solution.
B)joint profits are maximized.
C)there are multiple Nash equilibria.
D)there is a prisoners' dilemma.

Question

Quizplus · Accepted Answer

When both firms have dominant strategies, it means that they both have a clear best action regardless of what their competitor does. In this case, the outcome is called a dominant strategy solution, where each firm plays its dominant strategy and the outcome is the most efficient one for both firms.

When Both Firms Have Dominant Strategies