​For the Following Question

question 32

Multiple Choice

​For the following question
Consider a simultaneous move game between a union and a company.If both the parties bargain hard,each would gain nothing.If only one party bargains hard the accommodating party gets a profit of $1 million while the bargaining party gets a $5 million,while if they both accommodate,they each get $3 million.
-​Is this Nash equilibrium efficient?

• A)​Yes,because the sum of payoffs is highest
• B)No,because both the parties can do better
• C)No,because both the parties are maximizing their profits
• D)​All of the above

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Definitions:

Industry

A category or sector of the economy that involves similar types of products or services, characterized by common production processes and markets.

Top-Down Analysis

Investment analysis approach that starts with global economy conditions before drilling down to industry and company-specific factors.

Fixed Costs

Business expenses that remain the same regardless of the level of production or sales, such as rent, salaries, or loan payments.

Variable Costs

Costs that vary directly with the level of output or production activity.