Cournot-Nash Equilibrium

A Cournot-Nash Equilibrium occurs in a situation where multiple companies each choose how much of a product to produce, knowing that their decisions affect the market and other competitors. Each company aims to maximize its profit, considering how much others are producing. In equilibrium, no company can increase its profit by changing its own output alone, given the choices of others. Essentially, it’s a stable state where all players’ strategies are optimal responses to each other's actions, resulting in a balance in market supply and prices.