If Firms Are Competitive and Profit Maximizing, the Price of a Good

question 233

Multiple Choice

If firms are competitive and profit maximizing, the price of a good equals the

• A)marginal cost of production.
• B)fixed cost of production.
• C)total cost of production.
• D)average total cost of production.

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Definitions:

Nash Equilibrium

A concept in game theory where each participant's strategy is optimal, given the strategies of all other participants, leading to a situation where no participant can benefit by changing strategies unilaterally.

Credible Threats

A declaration or signal that one party can make to convey they are prepared to follow through with a promised action if certain conditions are not met.

Extensive Form

Extensive form represents a way of describing a game in game theory, showcasing the sequential nature of players' decisions and possible strategies.