The concept of Nash equilibrium states that

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Nash equilibrium states that no firm can improve their outcome holding the other firm's actions constant. This means that each firm is already making the best decision based on what their competitor is doing, and no one can gain an advantage by changing their strategy. Choice B is incorrect because Nash equilibrium doesn't guarantee the highest possible profit, only that no one can do better by changing their strategy. Choice C is incorrect because Nash equilibrium refers to a situation where firms are making simultaneous decisions, not alternating ones.

The Concept of Nash Equilibrium States That