The Nash equilibrium in an oligopolistic market is generally ________ for society than the outcome under collusion because the price is ________ marginal cost.
A) better; closer to
B) better; further above
C) worse; closer to
D) worse; further above
E) worse; equal to

Question

Quizplus · Accepted Answer

The Nash equilibrium in an oligopolistic market is where each firm maximizes its own profits, taking into account the actions of its competitors. It is generally better for society than the outcome under collusion because collusion leads to higher prices, which results in reduced social welfare. In a Nash equilibrium, the price is closer to marginal cost, which leads to a more efficient outcome.

The Nash Equilibrium in an Oligopolistic Market Is Generally ________