Each Nash equilibrium is a subgame perfect equilibrium.
<h3>What is meant by equilibrium?</h3>
Economic equilibrium is a state in which supply and demand, as well as other economic forces, are in balance and the values of economic variables do not change in the absence of external influences. When economic forces are in balance, there is said to be an economic equilibrium. In the absence of outside influences, economic variables essentially hold true to their equilibrium levels.
A player can obtain the desired outcome by sticking to their initial strategy, according to the Nash equilibrium, a decision-making theorem in game theory. Each player's approach in the Nash equilibrium is the best one given what the other players have decided. We look at each action profile separately in order to identify the Nash equilibria. By deciding to take an alternative course of action to her current one, neither player can increase her payout. The action profile in question is a Nash equilibrium.
Hence, Option C is correct. Each Nash equilibrium is a subgame perfect equilibrium.
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