A Nash equilibrium occurs when a. oligopolists cooperate with each other. b. eco

Question

A Nash equilibrium occurs when a. oligopolists cooperate with each other. b. economic actors who are interacting choose their best strategy given the strategies chosen by others. c. the efficient allocation of resources is achieved by setting marginal revenue equal to marginal cost. d. a monopolist is forced to produce the efficient level of output. A Nash equilibrium occurs when a. oligopolists cooperate with each other. b. economic actors who are interacting choose their best strategy given the strategies chosen by others. c. the efficient allocation of resources is achieved by setting marginal revenue equal to marginal cost. d. a monopolist is forced to produce the efficient level of output. A Nash equilibrium occurs when a. oligopolists cooperate with each other. b. economic actors who are interacting choose their best strategy given the strategies chosen by others. c. the efficient allocation of resources is achieved by setting marginal revenue equal to marginal cost. d. a monopolist is forced to produce the efficient level of output.

Explanation / Answer

Nash equilibrium is a concept in game theory where the optimal decision of one player chooses his/her best strategy given the strategy of another player. Thus, there is no incentive for the player to move from their optimal strategy.

Thus, Nash equilibrium occurs when economic actors who are interacting choose their best strategy given the strategies are chosen by others.

Thus, Option B is the correct answer.

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