Nash Equilibrium Is When

question 16

Multiple Choice

Nash equilibrium is when

• A) no single actor can be made better off without at the same time making another actor worse off.
• B) at least one actor can be made better off without at the same time making another actor worse off.
• C) neither player has an incentive to change strategies unilaterally.
• D) both players have the advantage to change strategies unilaterally.
• E) one player has the advantage to change strategies unilaterally but the other player doesn't.

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Definitions:

Shutdown Point

The point where a firm's revenue is not enough to cover its variable costs, leading to a decision to cease production temporarily.

Short Run

In economics, a period during which at least one input, like factory size or machinery, is fixed and cannot be changed, as opposed to the long run where all factors can be varied.

Long Run

A period in economic analysis where all inputs can be adjusted and there are no fixed factors of production.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, reflecting the true profitability of a company.