Consider the following game in which two firms decide how much of a homogeneous good to produce. The annual profit payoffs for each firm are stated in the cell of the game matrix, and Firm A's payoffs appear first in the payoff pairs: What is the Nash equilibrium for this game?
A) Both firms producer low levels of output.
B) Both firms produce high levels of output.
C) Firm A produces low levels of output, and Firm B produces high output.
D) Firm A produces high levels of output, and Firm B produces low output.
E) There is more than one Nash equilibrium for this game.

Question

Consider the following game in which two firms decide how much of a homogeneous good to produce. The annual profit payoffs for each firm are stated in the cell of the game matrix, and Firm A's payoffs appear first in the payoff pairs:  What is the Nash equilibrium for this game?
A) Both firms producer low levels of output. 
B) Both firms produce high levels of output. 
C) Firm A produces low levels of output, and Firm B produces high output. 
D) Firm A produces high levels of output, and Firm B produces low output. 
E) There is more than one Nash equilibrium for this game.

Quizplus · Accepted Answer

The Answer of Consider the following game in which two firms decide how much of a homogeneous good to produce. The annual profit payoffs for each firm are stated in the cell of the game matrix, and Firm A's payoffs appear first in the payoff pairs:  What is the Nash equilibrium for this game?
A) Both firms producer low levels of output. 
B) Both firms produce high levels of output. 
C) Firm A produces low levels of output, and Firm B produces high output. 
D) Firm A produces high levels of output, and Firm B produces low output. 
E) There is more than one Nash equilibrium for this game.

Consider the Following Game in Which Two Firms Decide How