Why the definition matters
Nash equilibrium is defined relative to specified participants, actions, information and payoffs. When the others’ actions are fixed, no one improves their own result through a unilateral deviation. This is a stability condition of the model, not a claim that everyone receives the best possible outcome.[1]
Two companies can end up with lower combined profit than under another combination of actions if each company separately benefits from deviating from that other combination. The specific conclusion depends on the payoff matrix. Invented numbers provide an educational result, not proof of how real companies behave.
Limitation
There may be several equilibria; the information structure and sequence of moves can change the analysis. Repeated interaction differs from a one-off game. The existence of an equilibrium does not predict how quickly participants will reach it.
The conditional producer matrix and assumption checks appear in the [guide to competition and cooperation](/guides/game-theory-competition/). A theoretical model is not a legal assessment of whether market conduct is permissible.
[1] MIT OpenCourseWare, Game Theory for Managers; topics on strategic form and equilibrium. [Primary material: Lecture Notes: Game Theory for Managers](https://ocw.mit.edu/courses/15-040-game-theory-for-managers-spring-2004/pages/lecture-notes/)