Table 17-17 This Table Shows a Game Played Between Two Firms, Firm

question 224

Multiple Choice

Table 17-17
This table shows a game played 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) .
-Refer to Table 17-17. Which of the following outcomes represent the Nash equilibrium in this game?

• A)Q=2 for Firm A and Q=3 for Firm B.
• B)Q=3 for Firm A and Q=2 for Firm B.
• C)There is no Nash equilibrium in this game since neither player has a dominant strategy.
• D)Both a and b are correct.

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Definitions:

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