Consider the same game as above between two firms, Firm A and Firm B. In this ga
ID: 1218229 • Letter: C
Question
Consider the same game as above between two firms, Firm A and Firm B. In this game each firm must decide how much output (Q) to produce: 2 units or 3 units. The profit for each firm is given in the table as (Profit for Firm A, Profit for Firm B).
Which of the following represents the Nash Equilibrium in this one-shot game?
A) Q=2 for Firm A and Q=2 for firm B
B) Q=3 for Firm A and Q=2 for Firm B
C) Q=2 for Firm A and Q=3 for Firm B
D) Q=3 for Firm A and Q=2 for Firm B
Firm B 0-3 4, 12 6.6 0-2 10, 10 0-3 12,4 12, 4 Firm AExplanation / Answer
In this game the following options represents the Nash Equilibrium in this one-shot game.
B) Q=3 for Firm A and Q=2 for Firm B
C) Q=2 for Firm A and Q=3 for Firm B
Both the above options represents the Nash Equilibrium.