Without externalities, the noncooperative Nash equilibrium for a given market can be expected to approximate:

Question

Quizplus · Accepted Answer

Without externalities, the noncooperative Nash equilibrium is expected to approximate the efficient, competitive equilibrium. This is because in the absence of externalities, firms will have no incentive to deviate from the competitive outcome, and the market will naturally reach the efficient allocation of resources. Choices A, C, and D involve distortions that are not expected in a market without externalities.

Without Externalities, the Noncooperative Nash Equilibrium for a Given Market