A Nash equilibrium is an equilibrium in which:
A)no trade-offs are made by buyers and sellers.
B)the choice that each player makes is a best response to the choices other players are making.
C)maximum profits are earned by each player, due to cooperative decision making.
D)cooperation between market participants leads to self-serving but nonoptimum results.

Question

Quizplus · Accepted Answer

A Nash equilibrium occurs when each player chooses their best response given the choices of the other players. This means that no player has an incentive to deviate from their chosen strategy, as doing so would result in a worse outcome for them. In other words, each player is "optimizing" their decision based on the decisions of the others, resulting in a stable equilibrium point.

A Nash Equilibrium Is an Equilibrium in Which