If neither firm has a dominant strategy, a Nash equilibrium cannot exist
Indicate whether the statement is true or false
False. Even if a firm has no strategy that dominates all others, it may still have a strategy that is the best given what the other firm is doing. When this is true for both firms for the same strategy pair, a Nash equilibrium exists.
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If a firm increases output when MR > MC, then:
a. profit will equal zero. b. profit will increase. c. profit will decrease. d. profit will remain the same. e. the firm is minimizing losses.