Explain the meaning of a Nash equilibrium when firms are competing with respect to price. Why is

Question:

Explain the meaning of a Nash equilibrium when firms are competing with respect to price. Why is the equilibrium stable? Why don’t the firms raise prices to the level that maximizes joint profits?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Microeconomics

ISBN: 978-0132857123

8th edition

Authors: Robert Pindyck, Daniel Rubinfeld

See More Books

Question Posted: Dec 22, 2015 02:30 AM

See More Questions

Explain the meaning of a Nash equilibrium. How does it differ from an equilibrium in dominant strategies?
Explain the meaning of a sinking fund provision on a bond issue.
Explain the meaning of a preexisting condition.
How are Recovery Audit Contractors paid? Question 23 options: RACs are reimbursed $100,000 annually RACs are reimbursed on a contingency-based system RACs are paid on a contract basis RACs are not...
Stanford issues bonds dated January 1, 2015, with a par value of $500,000. The bonds annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in...
word meidimotiomed ants 101 10 9. Is there an isomorphism op such that p(2) = 15. Complete the mapping if possible or show why it is not possible. (p: Z10 U(Z22) - (15 points) + ENTO 0 10. 1 2 3 4...
The smooth, concrete-lined channel shown in Fig. P10.46 is built on a slope of $2 \mathrm{~m} / \mathrm{km}$. Determine the flowrate if the depth is $y=1.5 \mathrm{~m}$. Figure P10.46 -6 m- 1.0 m...
Dunstreets Department Store would like to develop an inventory ordering policy of a 95 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the...
Denver would like your advice in relation to two property matters, one concerning 53 Cross Street and the other concerning Swettenham Cottage. 53 Cross Street Denver and his brother, Watson,...
Rochester Manufacturing Corporation (RMC) is considering moving some of its production from traditional numerically controlled machines to a flexible manufacturing system (FMS). Its computer...
What do the Cournot and Bertrand models have in common? What is different about the two models?
The kinked demand curve describes price rigidity. Explain how the model works. What are its limitations? Why does price rigidity occur in oligopolistic markets?
Rosewater Corporation, a publicly traded company, reported a realized gain in the year ended April 30, 2015, on the sale of a long-term bond investment that was held to earn interest revenue. For the...
At year-end 2016, total assets for Arrington Inc. were $1.4 million and accounts payable were $395,000. Sales, which in 2016 were $3 million, are expected to increase by 30% in 2017. Total assets and...
Indicate the relationship of the following pairs of compounds as unrelated, constitutional isomers, diastereomers, enantiomers, or identical (identical compounds are sometimes referred to as...
Why are statistical process control techniques are often used in manufacturing operations?
Where is "loss on exchange" listed on the adjusted trial balance?
Earnest has 8 different textbooks for his course this term that he wants to arrange along a single shelf. Two of the textbooks are for math, three are for CSC, two are for English, and one is for...
Air initially at 500 kPa and 2 m 3 is expanded to a volume of 7 m 3 in an isothermal process. Use EES or a spreadsheet to plot the process on a P-V diagram. At least ten points should be used from...
To balance the chemical equation SiH3 + O2 SiO2 + HO, you could introduce coefficients a, b, c, d and write aSiH3 + bO2 cSiO + dHO then write linear equations for each element. The equation for Si...
A widget manufacturer has an infinitely substitutable production function of the form q = 2K + L a. Graph the is oquant maps for q = 20, q = 40, and q = 60. What is the RTS along these is oquants? b....
Suppose that the Acme Gumball Company has a fixed proportions production function that requires it to use two gumball presses and one worker to produce 1000 gumballs per hour. a. Explain why the cost...
The long-run total cost function for a firm producing skateboards is TC = q3 40q2 + 430q Where q is the number of skateboards per week. a. What is the general shape of this total cost function? b....
Assume you have a portfolio consisting of a $400,000 investment in stock A and a $600,000 investment in stock B. Suppose that the daily volatilities of these two assets are 2% and 1.5%, respectively,...
What is the role of education in promoting social mobility and reducing inequality, and how can educational systems be reformed to better serve diverse populations while preparing individuals for the...
A European call option and put option on a non-dividend paying stock both have a strike price of $51 and an expiration date in 6 months. The put sells for $2.50 and the call sells for $2. The...

Explain the meaning of a Nash equilibrium when firms are competing with respect to price. Why is

Question:

Step by Step Answer:

A Nash equilibrium in price competition occurs when each firm chooses its price assuming its com...View the full answer

Microeconomics

Students also viewed these Economics questions