An equilibrium in which each firm in an oligopoly maximizes profit, given the actions of its rivals, is called
A)a general equilibrium.
B)a dominant equilibrium.
C)a Nash equilibrium.
D)an oligopoly equilibrium.

Question

Quizplus · Accepted Answer

A Nash equilibrium is a situation in which each firm is doing the best it can given the actions of its competitors. In other words, no firm can improve its outcome by changing its strategy, assuming the strategies of the other firms remain unchanged. This is a commonly studied concept in oligopoly, as firms in this market structure must consider the actions and reactions of their competitors when making strategic decisions.

An Equilibrium in Which Each Firm in an Oligopoly Maximizes