If One Player in a Game Uses a Mixed Strategy

question 23

Multiple Choice

If one player in a game uses a mixed strategy that leaves the other player with a unique pure strategy best response, a mixed strategy equilibrium ___________ exist.

• A) does not
• B) does
• C) It is not possible answer without knowing the probabilities

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Definitions:

Total Revenue

The total income a firm receives from selling its products; calculated as the quantity sold multiplied by the price per unit.

Total Cost

The sum of fixed and variable costs incurred by a business in the production of goods or services.

Profit

The financial gain achieved when the revenue gained from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Economic Profit

The disparity between total income and total outlays, considering both manifest and concealed costs.