When an oligopoly market reaches a Nash equilibrium,
A)the market price will be different for each firm.
B)the firms will not have behaved as profit maximizers.
C)a firm will have chosen its best strategy, given the strategies chosen by other firms in the market.
D)a firm will not take into account the strategies of competing firms.

Question

Quizplus · Accepted Answer

In a Nash equilibrium, each firm in an oligopoly chooses its best strategy given the strategies chosen by the other firms. This means that each firm has considered the actions of its competitors and has selected its optimal response, leading to a stable outcome where no firm has an incentive to deviate unilaterally.

When an Oligopoly Market Reaches a Nash Equilibrium