In the Simplest Version of the Cournot Model, We Assume

question 72

Multiple Choice

In the simplest version of the Cournot model, we assume

• A)the firms set quantities independently and simultaneously.
• B)the firms have identical costs and sell identical products.
• C)there are a small number of firms, and no other firm can enter the market.
• D)All of the above.

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Definitions:

Decrease in Demand

A downward shift in the demand curve for a product or service, indicating that consumers are willing to purchase less at each price level.

Substitution Effect

The Substitution Effect refers to changes in consumption patterns due to a change in the relative prices of goods, leading consumers to replace more expensive items with less costly alternatives.

Tea

A beverage made by steeping processed leaves, buds, or twigs of the tea plant in hot water, enjoyed globally for its aromatic flavors.

Coffee

A brewed drink prepared from roasted coffee beans, which are the seeds of berries from the Coffea plant.