Author Question: Which of the following is notan assumption of the Cournot model presented in the text? (Read 80 times)

jake · **on:** Apr 19, 2019

Question 1

In the Cournot model, when a new firm begins production it assumes its demand curve is

◦ the market demand less the amount the other firm is selling.
◦ the market demand plus the amount the other firm is selling.
◦ the same as the competing firm's demand curve.
◦ one-half of the competing firm's demand curve.

Question 2

Which of the following is
not an assumption of the Cournot model presented in the text?

◦ There are two firms in an industry.
◦ Each firm takes the output of the other firm as given.
◦ Both firms maximize profits.
◦ If the first firm cuts price, the second firm will follow and if the first raises price, the second will not follow.

jordangronback · **Reply #1 on:** Apr 19, 2019

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