Question

The Nash equilibrium in an oligopolistic market is generally ________ for society than the outcome under collusion because the price is ________ marginal cost. a. better; closer to b. worse; equal to c. better; further above d. worse; further above

Answer 1

The Nash equilibrium in an oligopolistic market is generally worse for society than the outcome under collusion because the price is equal to marginal price.

What is Oligopoly?

• A market structure which has a small number of enterprises and none of which can prevent the others from having a large impact known as an oligopoly.
• The market share of the major companies is calculated using the concentration ratio.
• Basically, a market with a monopoly has just one producer, a duopoly has two businesses.
• An oligopoly has three or more businesses. Although there is no exact maximum limit to the number of businesses in an oligopoly.
• Mainly, there must be few enough that the decisions of one business have a big impact on the others.

What is Nash Equilibrium?

• The Nash equilibrium is the most popular technique in game theory to describe the outcome of a non-cooperative game involving two or more participants.
• Each player in a Nash equilibrium is considered to be aware of the equilibrium strategies of the other players, and changing one's own strategy will not benefit anyone.
• Nash Equilibrium shares its name with the mathematician John Forbes Nash Jr.

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