​A Nash Equilibrium Always Results in the Highest Total Profit

question 156

True/False

​A Nash Equilibrium always results in the highest total profit for the firms in an oligopoly market.

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Definitions:

Production Function

An equation that describes the relationship between the inputs used in production and the output generated from those inputs.

Marginal Product

The additional output produced as a result of using one more unit of a particular input, holding all other inputs constant.

Profit Maximization

The process by which a company determines the price and output level that generates the maximum profit.

Production Function

A formula that specifies the output of a firm, an industry, or an entire economy for all combinations of inputs.