Asked by Angela Trevino on May 31, 2024
Verified
Which oligopoly model(s) have the same results as the competitive model?
A) Cournot
B) Bertrand
C) Stackelberg
D) Both Cournot and Stackelberg
Oligopoly Model
An economic model that describes a market structure where a market or industry is dominated by a small number of large sellers, leading to limited competition.
Competitive Model
A market structure where many firms compete with similar or identical products and no single firm can influence market prices significantly.
Cournot
Refers to a model of oligopoly in which firms compete on the amount of output they will produce, affecting market prices.
- Understand the different oligopoly models and how they predict outcomes in terms of prices and quantities.
Verified Answer
MS
Maksym ShevchenkoJun 05, 2024
Final Answer :
B
Explanation :
The Bertrand model has the same results as the competitive model, as both assume products are perfect substitutes and firms are price takers. In Bertrand, firms compete on price, leading to a situation where price is equal to marginal cost and profits are zero. Cournot and Stackelberg models, on the other hand, result in firms having some market power and earning positive profits.
Learning Objectives
- Understand the different oligopoly models and how they predict outcomes in terms of prices and quantities.