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 Nash equilibrium for this game is

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 Nash equilibrium for this game is

Quizplus · Accepted Answer

The Nash equilibrium in this game occurs when both firms choose the strategy that maximizes their payoff given the other firm's strategy. In this case, if Firm A chooses to produce 6 units, Firm B's best response is to produce 6 units as well, since it yields a higher profit than producing 5 units. Similarly, if Firm B chooses to produce 6 units, Firm A's best response is to also produce 6 units. Therefore, (6,6) is the Nash equilibrium outcome.