Explain how the outcome of the Cournot model is achieved
What will be an ideal response?
The Cournot model begins with a new firm producing nothing and the existing firm producing the entire amount of industry output. When the new firm begins operating, it assumes that the existing firm will continue to act as a monopolist. This means that the demand curve for the new firm is everything on the demand curve below the price charged by the existing firm. Once the new firm begins producing, the existing firm finds that its demand is lower. When it begins to make output decisions, it believes that the new firm's output will remain constant and therefore produces a lower output. This will change the amount that the new firm wants to produce which will change the amount that the existing firm wants to produce. The adjustments continue until the two firms split the market and charge the same price.
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During the Great Depression, what appeared to be ________ fiscal policy was actually not when the ________ budget deficit or surplus is examined
A) expansionary; cyclically adjusted B) contractionary; actual C) expansionary; actual D) contractionary; cyclically adjusted
Which of the following would be a consequence of the retirement of the internally held portion of the public debt?
A. A reduction in the nation's productive capacity B. A reduction in the nation's standard of living C. A redistribution of the nation's wealth among its citizens D. An increase in aggregate expenditures in the economy