Refer to the following normal form game of price competition question

-What is the Nash equilibrium of this one-shot game?
A)Firm A will charge a lower price and firm B will charge a lower price
B)Firm A will charge a higher price and firm B will charge a lower price
C)Firm A will charge a lower price and firm B will charge a higher price
D)Firm A will charge a higher price and firm B will charge a higher price

Question

​Refer to the following normal form game of price competition question
 
-​What is the Nash equilibrium of this one-shot game?
A)​Firm A will charge a lower price and firm B will charge a lower price 
B)Firm A will charge a higher price and firm B will charge a lower price 
C)Firm A will charge a lower price and firm B will charge a higher price 
D)​Firm A will charge a higher price and firm B will charge a higher price

Quizplus · Accepted Answer

In a Nash equilibrium, each player's strategy is optimal given the other player's strategy. If both firms choose to charge a lower price, neither firm has an incentive to deviate from this strategy unilaterally, as doing so would not increase their payoff given the strategy of the other firm. This makes option A the Nash equilibrium.

​Refer to the Following Normal Form Game of Price Competition

Refer to the Following Normal Form Game of Price Competition