Which of the Following Is True of a Cournot Model

question 60

Multiple Choice

Which of the following is true of a Cournot model?

• A) A ?rm's pro?t-maximizing output does not vary with the decision of its rival.
• B) A ?rm will always treat its rival's output as a given.
• C) The ?rm will produce where MC > MR.
• D) It is a price-based approach to duopoly.

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Definitions:

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the present value of expected cash flows minus the initial investment.

Outstanding Shares

Shares of a company that are owned by investors, including restricted shares held by the company’s insiders.

Value Per Share

A measure reflecting the equity value of a company divided by its total number of outstanding shares, indicating what each share is worth.

Equity-Financed

This term refers to the portion of a company's operations or assets that is funded by issuing equity (stocks) instead of taking on debt.