An Important Characteristic of a Dominant Strategy Is That

question 36

Multiple Choice

An important characteristic of a dominant strategy is that:

• A)it is the best strategy only in prisoner's dilemma
• B)it always leads to a Nash equilibrium that makes all players equally well off
• C)it can prevent the game reaching a Nash equilibrium
• D)it is the best strategy for a player, regardless of whatever strategy the opponent chooses

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Definitions:

Price Elasticity

A metric that reflects the degree to which the demand for a product changes in response to alterations in its price, indicating consumer sensitivity to price fluctuations.

Marginal Cost

The cost of producing an additional unit of output, which is an important factor in economic decision making.

Profit-maximizing Price

The price that results in the maximum possible profit for a firm, based on its cost structure and demand for its products.

Elasticity of Demand

A gauge for understanding how price changes influence the consumer demand for a particular good.