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Figure: Payoff Matrix for Canada and the European Union
-(Figure: Payoff Matrix for Canada and the European Union)Use Figure: Payoff Matrix for Canada and the European Union.Suppose that Canada and the European Union both produce corn,and each region can make more profit if output is limited and the price of corn is high.The Nash equilibrium combination is for Canada to produce a _____ output and the European Union to produce a _____ output.
A) high;high
B) high;low
C) low;low
D) low;high

Question

Use the following to answer questions :
Figure: Payoff Matrix for Canada and the European Union 
-(Figure: Payoff Matrix for Canada and the European Union)Use Figure: Payoff Matrix for Canada and the European Union.Suppose that Canada and the European Union both produce corn,and each region can make more profit if output is limited and the price of corn is high.The Nash equilibrium combination is for Canada to produce a _____ output and the European Union to produce a _____ output.
A) high;high 
B) high;low 
C) low;low 
D) low;high

Quizplus · Accepted Answer

The Nash equilibrium is the combination of strategies that maximizes the payoff for each player, given the strategy of the other player. In this case, the Nash equilibrium is for Canada to produce a high output and the European Union to produce a low output. This is because Canada can make more profit if it produces a high output and the European Union produces a low output, and the European Union can make more profit if it produces a low output and Canada produces a high output.

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