Chapter 5

Competencies

1. Use graphs to describe three concepts of Game Theory: best response, Nash equilibrium, and dominant strategy
2. Identify the producer’s behavior to maximize his revenue
3. Identify the consumer’s behavior to maximize his utility

Chapter Outlines

1. Demand downward and Supply upward in best response
2. Demand meets Supply in Nash equilibrium
3. The dominant for Producer in first half and the dominant for Consumer in the second half.