Neither Edison nor Hilary has an incentive to increase output further, nor does either have an incentive to decrease output. This outcome is an example of

Question

Braeden Warren

Business

31 October, 17:14

Neither Edison nor Hilary has an incentive to increase output further, nor does either have an incentive to decrease output. This outcome is an example of

+2

Answers (1)

Know the Answer?

Rishi Eaton · Answer 1

The possible answers for this questions would be

Nash equilibrium / resale price maintenance / tying / predatory pricing.

The correct answer is:

Nash equilibrium

Explanation:

In the Nash equilibrium strategy the idea of the implied ones on competition is to maintain an equilibrium on the game according to the other's strategies. The game is designed by every player based on the other possible movements, so basically at the end no one wins, they are only on the edge keeping alive the subject during the game.

The Nash equilibrium concept was introduced in game theory after the presentation of the doctoral thesis about equilibriums by the mathematician John Forbes Nash Jr.

In economy, this competition would be carried out by the companies that are competitive in the market by the same kind of good having the possibility to choose how much they want to produce in order to acquire the maximum rentability, in this case, as one enterprise increases production or lower prices the other ones do it to; reason why it is considered an imperfect equilibrium.