An equilibrium occurs in a game when
A)price equals marginal cost.
B)quantity supplied equals quantity demanded.
C)all independent strategies counterbalance all dominant strategies.
D)all players follow a strategy that they have no incentive to change.

Question

Quizplus · Accepted Answer

An equilibrium occurs when all players follow a strategy that they have no incentive to change. This is because any deviation from this strategy would result in a worse outcome for the player. Therefore, D is the correct answer. While A and B are conditions of equilibrium in a market, they do not apply to game theory. C is incorrect as it refers to a specific type of equilibrium, Nash equilibrium, which only applies to games with dominant strategies.

An Equilibrium Occurs in a Game When