Consider the following output-choice game for two firms: Firm 2 - low Firm 2 - medium Firm
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Question:
Consider the following output-choice game for two firms:
Firm 2 - low | Firm 2 - medium | Firm 2 - high | |
Firm 1 - low | 150, 150 | 100, 160 | 75, 100 |
Firm 1 - medium | 160, 100 | 110, 110 | 50, 75 |
Firm 1 - high | 100, 75 | 75, 50 | 0, 0 |
What is the Nash equilibrium for this game?
A. | Both firmsproduce medium output | |
B. | Firm 1 produces medium output and Firm 2 produces high output | |
C. | Firm 1produces low output and Firm 2produces high output | |
D. | Both firms produce high output |
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