-Consider the static game depicted in Figures 10.4, which summarizes consumer surpluses in billions of dollars from alternative export-subsidy strategies by the U.S. and Japan. If the export subsidies are intended to benefit consumers, the Cournot-Nash equilibrium strategy profile is:

Question

Quizplus · Accepted Answer

In a Cournot-Nash equilibrium, each player chooses their best response given the other player's strategy. If both countries aim to maximize consumer surplus, the equilibrium is {No subsidy, No subsidy} as subsidies can lead to inefficiencies and reduced consumer surplus.

-Consider the Static Game Depicted in Figures 10