The concept of Nash Equilibrium:
A. has wide applicability.
B. is limited in its applicability to economic behavior because firms do not follow their dominant strategies.
C. is limited in its applicability to economic behavior because firms generally follow their dominant strategies.
D. has been disproven by modern economists.
Answer: A
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For the unregulated, single-price monopoly shown in the figure above, when its profit is maximized, output will be
A) 4 units per year and the price will be $6. B) 4 units per year and the price will be $4. C) 6 units per year and the price will be $4. D) None of the above answers is correct.
Suppose a market were currently at equilibrium. A rightward shift of the supply curve would cause a(n)
A) increase in price but a decrease in quantity. B) decrease in price but an increase in quantity. C) increase in both price and quantity. D) decrease in both price and quantity.