-Refer to Figure 2.2, which represents a simultaneous-move, noncooperative, one-time game. A Nash equilibrium occurs at the strategy profile:
A) {Raise price, Raise price}.
B) {Raise price, Don't raise price}.
C) {Don't raise price, Raise price}.
D) {Don't raise price, Don't raise price}.

Question

-Refer to Figure 2.2, which represents a simultaneous-move, noncooperative, one-time game. A Nash equilibrium occurs at the strategy profile:
A) {Raise price, Raise price}. 
B) {Raise price, Don't raise price}. 
C) {Don't raise price, Raise price}. 
D) {Don't raise price, Don't raise price}.

Quizplus · Accepted Answer

A Nash equilibrium is a situation in a non-cooperative game where no player can benefit by changing strategies while the other players keep their strategies unchanged. In this case, option D represents a scenario where neither player can unilaterally improve their payoff by changing their decision from "Don't raise price" to "Raise price," assuming the other player's strategy remains the same. This makes it a Nash equilibrium.