The concept of a Nash equilibrium,when applied to an oligopoly,relies on the notion that Firm A in an oligopoly chooses its own best strategy based on which consideration
A)based on the strategies that other firms have chosen
B)based on the knowledge that other firms are likely to choose their strategies in response to Firm A's choice of a strategy
C)based on the objective of maximizing the collective profits of all firms in the industry
D)based on the internal financial information of Firm A

Question

Quizplus · Accepted Answer

In a Nash equilibrium, each firm in an oligopoly chooses its own best strategy based on the strategies that other firms have chosen. This is because each firm's profit depends not only on its own strategy but also on the strategies of other firms in the industry. Therefore, each firm tries to anticipate how its competitors will behave and chooses a strategy accordingly to maximize its own profit.

The Concept of a Nash Equilibrium,when Applied to an Oligopoly,relies