Question

A Nash equilibrium is defined as the outcome that:

results when both players lose by deviating from the equilibrium play.

maximizes each player’s payoff against the strategy chosen by the other.

results in equal payoffs to both players.

maximizes the sum of the players’ payoffs.

is unique and invariant to the strategy chosen by the other.

When the four-firm concentration ratio is less than 40 percent, we can conclude that:

the industry is monopolistically competitive.

the four dominant firms in the industry enjoy a high degree of market power.

the industry is a tight oligopoly.

the industry is competitive.

the market shares of each firm in the industry are highly unequal.

A dominant strategy:

is the best response to any strategy that the other player might select.

sometimes means using a mixed strategy.

guarantees a player a higher payoff than its competitor.

minimizes the other player’s payoff.

calls for a contingent course of action.

Firms do not have the economic incentive to advertise when:

the goods that are produced are imperfect substitutes.

there is information asymmetry in the market.

products are standardized.

there are entry barriers in the market.

there are a small number of firms in the market.

Answer 1

A Nash equilibrium is defined as the outcome that:
maximizes each player’s payoff against the strategy chosen by the other.
Exp: Each player does not have incentive to deviate from the NE.

When the four-firm concentration ratio is less than 40 percent, we can conclude that:
the industry is competitive.
Exp: No firm dominates the industry

A dominant strategy:
is the best response to any strategy that the other player might select.

Exp: Dominant strategy is the strategy that maximises payoff irrespective of the action of the other player.