In the Simplest Version of the Cournot Model, We Assume

question 24

Multiple Choice

In the simplest version of the Cournot model, we assume the firms

• A)set quantities independently and simultaneously.
• B)set quantities independently and sequentially.
• C)set price independently and simultaneously.
• D)are not in a Nash equilibrium.

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Definitions:

Diseconomies of Scale

A situation in which a company or business grows so large that the costs per unit increase, leading to decreased efficiency.

Large-Scale Business

A business that operates on a large scale, often involving extensive operations, significant capital, numerous employees, and a wide geographical reach.

Law of Diminishing Returns

A principle stating that if one factor of production is increased while others remain constant, the overall returns will eventually decrease after a certain point.

Marginal Cost Curves

Graphs that show how the cost of producing one additional unit changes as the production volume increases.