In a Cournot oligopoly, if the demand curve is not linear, the firms' best- response curves _________________ be downward sloping and ________be linear.

Question

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If the demand curve is not linear, the firms' best-response curves will not be downward sloping because the slope of the demand curve at each point will be different. However, the best-response curves may not be linear either because the optimal output of a firm depends on the output choices of its rivals, which may not be constant along the curve. Therefore, the best choice is C, in which the best-response curves will be non-linear but the firms' will not be downward sloping.

In a Cournot Oligopoly, If the Demand Curve Is Not