Which of the Following Is Not an Assumption of the Cournot

question 139

Multiple Choice

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

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

Understand escalation of commitment, its causes, and effects.

Relate personality traits to the likelihood of escalation of commitment.

Recognize the treatment and impact of sunk costs in decision making.

Identify examples of cognitive biases in post-decision evaluations.

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Definitions:

Hayflick Limit

Genetically controlled limit, proposed by Hayflick, on the number of times cells can divide in members of a species.

Maximum Life Span

The upper boundary of life expectancy for an organism, representing the greatest age an individual of a species can live under ideal conditions.

Prefrontal Regions

Areas of the frontal lobes of the brain responsible for complex behaviors including decision making, planning, and moderating social behavior.

Cerebellar Regions

Areas within the cerebellum, a part of the brain that plays a vital role in motor control, and can also be involved in cognitive functions.