If Happy Cleaners and Sparkle Cleaners are in a Cournot oligopoly, the Cournot equilibrium will .

Question

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In a Cournot oligopoly, each firm takes the output of other firms as given and decides its own optimal output level. The Cournot equilibrium occurs at the point where the best-response curves of each firm intersect. Therefore, the answer is A. The option B is incorrect because a cartel is a collusive agreement between firms to reduce output and increase prices, which is illegal in most countries. The option C is incorrect because the equilibrium occurs at the intersection of both firms' best-response curves, not just one firm's. The option D is incorrect because the Cournot equilibrium provides an incentive for firms to adjust their output but not necessarily to change their behavior altogether.

If Happy Cleaners and Sparkle Cleaners Are in a Cournot