Which of the Following Is True of the Cournot Model

question 31

Multiple Choice

Which of the following is true of the Cournot model of a duopoly?

• A) The products sold by the firm are imperfect substitutes.
• B) The equilibrium price in a Cournot duopoly is higher than the price in a monopoly.
• C) The demand curve facing each firm is horizontal.
• D) The market price is determined by the output produced by the firm with the larger market share.
• E) The duopoly equilibrium lies between the pure-monopoly and purely competitive outcomes.

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Definitions:

Cohesive

Rephrased: Cohesion within a group indicates how well the members of the group stick together and support each other in pursuit of common objectives.

Liking Reciprocal

Reciprocal liking is the phenomenon where people tend to develop a preference for individuals who express liking for them, reinforcing mutual attraction and social bonding.

Opposite Qualities

Characteristics or attributes that are diametrically different from each other, often used to describe contrasting traits between entities or concepts.

Social Exchange Theory

A theoretical framework suggesting that social behavior is the result of an exchange process, aiming to maximize benefits and minimize costs.