Game theory is best applied to the analysis of:
A) perfect competition.
B) oligopoly.
C) monopoly.
D) All of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

Game theory is a useful tool in analyzing strategic behavior in situations where there are a small number of producers or sellers. This is most applicable in the case of oligopoly, where a few firms dominate the market and their behavior affects market outcomes. In perfect competition, there are many firms and no one firm has significant influence over the market, making game theory less useful. In a monopoly, there is no competition, so there is no interaction between firms to analyze. Therefore, the best application of game theory is in the analysis of oligopoly.

Game Theory Is Best Applied to the Analysis Of