Multiple Choice
Refer to the profits-payoff table for a duopoly. Which of the following statements is true about Nash equilibrium in this game?
A) A Nash equilibrium exists where X charges $7 and Y charges $5, because that is the cell that maximizes the combined profits of the two firms.
B) There are multiple Nash equilibriums in this game.
C) There is no Nash equilibrium in this game.
D) Nash equilibriums occur in this game only where the two firms are charging the same price.
Correct Answer:
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