-Refer to Figure 2.3, which represents a simultaneous-move, non-cooperative, 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}.
E) This game does not have a Nash equilibrium.

Question

-Refer to Figure 2.3, which represents a simultaneous-move, non-cooperative, 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}. 
E) This game does not have a Nash equilibrium.

Quizplus · Accepted Answer

In a Nash equilibrium, each player's strategy is the best response to the other player's strategy, given the strategies of all other players. Option D, {Don't raise price, Don't raise price}, represents a situation where neither player can unilaterally change their strategy to improve their payoff, assuming the strategy of the other player remains unchanged. This makes it a Nash equilibrium.