In a Nash equilibrium outcome for a two-firm balanced oligopoly
A) both firms avoid the worst case possible
B) both firms end up in the worst case possible
C) prices charged by both firms are relatively high
D) profits earned by both firms are relatively high
E) both firms form a cartel

Question

Quizplus · Accepted Answer

In a Nash equilibrium, each firm chooses its best strategy given the strategy of the other firm, avoiding the worst-case scenario, but not necessarily achieving the best possible outcome.

In a Nash Equilibrium Outcome for a Two-Firm Balanced Oligopoly