Answer to Question #320586 in Macroeconomics for Rose

Question

Nash equilibrium can be defined as the competitive outcome where _____

A. all firms set prices equal to average cost and all firms make economic

profit.

B. each firm sets a price equal to marginal cost and each firm makes

economic profit.

C. each firm sets a price higher than marginal cost and each firm makes

economic profit.

D. each firm sets a price lower than marginal cost and each firm makes

economic profit.

E. firms set a price lower than average cost and all firms make economic

profit.

Answer 1

B.) Each firm sets a price equal to marginal cost and each firm makes economic profit.