A Subgame Perfect Equilibrium Is When

question 9

Multiple Choice

A subgame perfect equilibrium is when:

• A)Every player's strategy is a Nash equilibrium in every subgame (part of the game).
• B)Players adopt strategies to maximize the total payoff to players in the game.
• C)Every player adopts a strategy that they would credible implement if they were ever required to.
• D)a and C

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Definitions:

Variable Cost

A cost that changes in direct proportion to changes in the level of business activity or output.

Fixed Cost

A cost that does not vary with the level of production or sales, such as rent, property taxes, and salaries.

Least-Squares Regression

A statistical technique used to determine the line that best fits a set of data points, minimizing the sum of the squares of the differences between the observed and estimated values.

Variable Cost

Expenses that change in direct proportion to the amount of production or the quantity of output generated.