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

Quizplus · Accepted Answer

The Nash equilibrium occurs when both firms choose strategies that are best responses to each other. In this case, both ADM and Ajinomoto producing 40 million pounds is the combination where neither firm has an incentive to deviate unilaterally.

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