When Participants in a Game Choose to Take Actions That

question 45

Multiple Choice

When participants in a game choose to take actions that result in a Nash equilibrium,

• A)no single participant has an incentive to change its action.
• B)each participant has chosen the best action possible,given what the others have chosen.
• C)no other set of actions could make ALL participants better off.
• D)both a and b
• E)all of the above

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Definitions:

Marginal Decision Rule

An economic principle which suggests that action should continue until marginal benefit equals marginal cost, optimizing resource allocation.

Downward-Sloping Demand

A representation of the relationship between the price of a good and the quantity demanded, illustrating that as price decreases, demand typically increases.

Number Of Firms

The total count of business entities operating within a specific market or industry.

Price Taker

A market participant that accepts prevailing prices as given, having no influence to alter the price of a good or service.