Question

Suppose that Barack and Michelle are duopolists. Barack is producing 300 units of output, and Michelle is producing 400 units of output. When Michelle produces 400 units, Barack maximizes profit by producing 300 units. When Barack produces 300 units of output, Michelle maximizes profit by producing 400 units. Barack and Michelle are

Answer 1

Barack and Michelle are at a Nash equilibrium

Step-by-step explanation:

They are at a Nash equilibrium i.e. they are producing at a point were they will be making a profit of irrespective of the strategy choose by the other firm in the market.

In a Nash equilibrium, every person in a group makes the best decision for herself, based on what she thinks the others will do