Asked by Austin Vaughn on Jun 28, 2024
Verified
If the members of an oligopoly could agree on a total quantity to produce and a price to charge, what quantity and price would they choose? Will this choice represent a Nash equilibrium?
Nash Equilibrium
A concept in game theory where no player can benefit by changing strategies if the strategies of the other players remain unchanged.
Oligopoly
A market structure characterized by a small number of firms controlling a large market share, leading to limited competition.
- Investigate the strategic deliberations of businesses within game theory situations, particularly concerning supreme strategies and Nash stability points.
Verified Answer
CS
Christian SalcedoJun 30, 2024
Final Answer :
the monopoly quantity and price; no because the self-interests of the individual oligopolists will encourage each oligopolist to produce a slightly higher level of output than the oligopolist's share of the monopoly quantity, which will lower the market price
Learning Objectives
- Investigate the strategic deliberations of businesses within game theory situations, particularly concerning supreme strategies and Nash stability points.