An Equilibrium in Which Each Firm in an Oligopoly Maximizes

question 355

Multiple Choice

An equilibrium in which each firm in an oligopoly maximizes profit, given the actions of its rivals, is called

• A)a general equilibrium.
• B)a dominant equilibrium.
• C)a Nash equilibrium.
• D)an oligopoly equilibrium.

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Definitions:

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment by determining the difference between the present value of cash inflows and outflows.

Zero

A numerical value representing no quantity or null in mathematical terms; it serves as a placeholder in the decimal system.

NPV

Net Present Value (NPV) is the calculation used to determine the present value of a series of future cash flows minus the initial investment, used in capital budgeting to assess the profitability of an investment.

IRR

The Internal Rate of Return is the discount rate that makes the net present value of all cash flows from a particular project equal to zero.