Table 17-18
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: 10 units or 12 units. The profit for each firm is given in the table as (Profit for Firm A, Profit for Firm B).

-Refer to Table 17-18. The Nash equilibrium for this game is

Question

Table 17-18
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: 10 units or 12 units. The profit for each firm is given in the table as (Profit for Firm A, Profit for Firm B).
 
-Refer to Table 17-18. The Nash equilibrium for this game is

Quizplus · Accepted Answer

In a Nash equilibrium, each player's strategy is optimal given the other player's strategy. 
If Firm A produces 10 units, Firm B's best response is to produce 12 units, as this earns them a higher profit ($110 versus $100). 
Likewise, if Firm A produces 12 units, Firm B's best response is still to produce 12 units, as this earns them a higher profit ($96 versus $80). 
Similarly, if Firm B produces 10 units, Firm A's best response is to produce 12 units, and if Firm B produces 12 units, Firm A's best response is still to produce 12 units. 
Therefore, the only option that satisfies the conditions of a Nash equilibrium is for both firms to produce 12 units (D).

Table 17-18 This Table Shows a Game Played Between Two Firms, Firm