Which of the following describes a Nash equilibrium?
A) A firm chooses its dominant strategy, if one exists.
B) Every competing firm in an industry chooses a strategy that is optimal given the choices of every other firm.
C) Market price results in neither a surplus nor a shortage.
D) All firms in an industry are earning zero economic profits.

Question

Quizplus · Accepted Answer

A Nash equilibrium occurs when every participant in the game or economic situation chooses a strategy that is optimal, given the choices of every other participant. This means each player's strategy is the best they can choose, based on what they believe the others will do.

Which of the Following Describes a Nash Equilibrium