Author Question: Which of the following assumptions were made by the Cournot model of oligopoly? a. Each seller ... (Read 57 times)

newyorker26 · **on:** Jun 30, 2018

Which of the following assumptions were made by the Cournot model of oligopoly?
a. Each seller psychoanalyzes the competition and decides how to react in all possible situations.
b. Each seller psychoanalyzes the competition and exactly predicts the output decisions of the competitors.
c. Each seller chooses its own output and believes the others in the market will respond to its choices.
d. Each seller chooses its own output and believes the others in the market will not respond to its choices.

Question 2

If toothpaste manufacturers compete in a monopolistically competitive market, then:
a. firms are price takers.
b. firms try to differentiate their products from those of competitors.
c. firms maximize profits by choosing output where price equals marginal cost.
d. there are significant barriers to entering the toothpaste industry.