In the Cournot model, the final level of output falls between the output that would prevail if the market were ________ and the output that would be set by a ________.
A) competitive; monopoly
B) oligopolistic; monopoly
C) monopolistic; cartel
D) monopolistically competitive; cartel

Question

Quizplus · Accepted Answer

In the Cournot model, which describes an oligopoly market where firms choose their output levels simultaneously, the final level of output is higher than that of a monopoly but lower than in a perfectly competitive market. This is because each firm in the Cournot model partially accounts for the output decisions of its competitors, leading to a level of production that is between the two extremes of monopoly and perfect competition.

In the Cournot Model, the Final Level of Output Falls