Table 17-16.This table shows a game played between two firms,Firm A and Firm B.In this game each firm must decide how much output (Q)to produce: 5 units or 6 units.The profit for each firm is given in the table as (Profit for Firm A,Profit for Firm B).

-Refer to Table 17-16.The dominant strategy For Firm A is to produce

Question

Table 17-16.This table shows a game played between two firms,Firm A and Firm B.In this game each firm must decide how much output (Q)to produce: 5 units or 6 units.The profit for each firm is given in the table as (Profit for Firm A,Profit for Firm B).
 
-Refer to Table 17-16.The dominant strategy For Firm A is to produce

Quizplus · Accepted Answer

The dominant strategy for Firm A is to produce 6 units as it gives them a higher profit regardless of what Firm B does. Similarly, the dominant strategy for Firm B is to produce 6 units as it gives them a higher profit regardless of what Firm A does. Therefore, both firms should produce 6 units, resulting in a Nash equilibrium.