Oligopoly: Game Theory and Nash Equilibrium
Correct.
Even though they each earn less than they could in this scenario, it is the Nash equilibrium. The Nash equilibrium requires both behave in their own best interest while holding what the other does as constant.
Producer A and Producer B are the only two producers of a good. The profits each producer receives every week are based on whether a high or low price is charged for the good, as shown in the chart:

Which of the following _best describes_ the Nash equilibrium?
Incorrect.
While it would be best for both of them to charge a low price, this is not the Nash equilibrium.
Incorrect.
It would be difficult to decide who gets to charge the high price and who charges the low price if they are not colluding.
Both charge a low price
Both charge a high price
One charges a high price, and the other charges a low price