Asked by Karina Goldberg on May 24, 2024
Verified
In the Cournot model, each firm chooses its actions on the assumption that its rivals will react by changing their quantities in such a way as to maximize their own profits.
Cournot Model
An economic model used to describe an industry structure in which firms compete on the quantity of output they will produce, which they decide on at the same time.
- Familiarize oneself with the basic notions of Cournot and Bertrand models amidst oligopoly contexts.
Verified Answer
AB
Arnav BallaniMay 25, 2024
Final Answer :
False
Explanation :
In the Cournot model, each firm chooses its quantity assuming that its rivals will keep their quantities constant, not that they will adjust their quantities in response.
Learning Objectives
- Familiarize oneself with the basic notions of Cournot and Bertrand models amidst oligopoly contexts.
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