When an oligopoly market is in Nash equilibrium,

Question

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In a Nash equilibrium, each firm chooses its best pricing strategy taking into account the strategies chosen by its rivals. This is because in an oligopoly market, each firm's decision affects the profits of its rivals, and vice versa. Therefore, in order to maximize its own profits, a firm needs to consider the strategies of its competitors when choosing its own pricing strategy. Options A and B are incorrect because collusion is illegal and firms in a Nash equilibrium are behaving as profit maximizers. Option C is incorrect because firms in an oligopoly market need to take into account the strategies of their rivals in order to make the best pricing decisions.

When an Oligopoly Market Is in Nash Equilibrium