Which of the following is an assumption of the Cournot model?
A) There is only one firm in an industry.
B) Each firm takes the output of the other firm as given.
C) The firms behave so as to maximize their revenues.
D) Firms collude to fix prices and quantities.

Question

Quizplus · Accepted Answer

The Cournot model assumes that in an oligopoly, each firm takes the output level of its competitors as given and decides its own output level based on this. This interdependence is a key feature of the Cournot competition model.

Which of the Following Is an Assumption of the Cournot