(Figure: Market for Two-Firm Industry III) According to the figure, which of the following statements is TRUE? I. If Firm B expects Firm A to charge $3, Firm B should charge $5.50.
II) If Firm A expects Firm B to charge $6, Firm A should charge $7.
III) The Nash equilibrium is for each firm to charge the same price.

Question

(Figure: Market for Two-Firm Industry III) According to the figure, which of the following statements is TRUE?  I. If Firm B expects Firm A to charge $3, Firm B should charge $5.50.
II) If Firm A expects Firm B to charge $6, Firm A should charge $7.
III) The Nash equilibrium is for each firm to charge the same price.

Quizplus · Accepted Answer

The Answer of (Figure: Market for Two-Firm Industry III) According to the figure, which of the following statements is TRUE?  I. If Firm B expects Firm A to charge $3, Firm B should charge $5.50.
II) If Firm A expects Firm B to charge $6, Firm A should charge $7.
III) The Nash equilibrium is for each firm to charge the same price.

(Figure: Market for Two-Firm Industry III) According to the Figure