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Figure: Payoff Matrix for Ajinomoto and ADM
-(Figure: Payoff Matrix for Ajinomoto and ADM)Use Figure: Payoff Matrix for Ajinomoto and ADM.The Nash equilibrium combination occurs when ADM produces _____ million kilograms and Ajinomoto produces _____ million kilograms.
A) 30;30
B) 40;40
C) 30;40
D) 40;30

Question

Use the following to answer questions :
Figure: Payoff Matrix for Ajinomoto and ADM 
-(Figure: Payoff Matrix for Ajinomoto and ADM)Use Figure: Payoff Matrix for Ajinomoto and ADM.The Nash equilibrium combination occurs when ADM produces _____ million kilograms and Ajinomoto produces _____ million kilograms.
A) 30;30 
B) 40;40 
C) 30;40 
D) 40;30

Quizplus · Accepted Answer

In a Nash equilibrium, each player's strategy is optimal given the strategy of the other player. In this payoff matrix, both Ajinomoto and ADM producing 40 million kilograms is the combination where neither firm can benefit by unilaterally changing their production level.

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