Assuming that oligopolists do not have the opportunity to collude, once they have reached the Nash equilibrium, it
A)is always in their best interest to supply more to the market.
B)is always in their best interest to supply less to the market.
C)is always in their best interest to leave their quantities supplied unchanged.
D)may be in their best interest to do any of the above, depending on market conditions.

Question

Quizplus · Accepted Answer

In a Nash equilibrium, each oligopolist is producing the quantity that maximizes their profit given the competitors' quantities. If they deviate from this quantity, their profit will decrease. Therefore, there is no incentive to produce more or less, and it is in their best interest to leave their quantities supplied unchanged.

Assuming That Oligopolists Do Not Have the Opportunity to Collude