In the Cournot model, each firm's ________ shows the firm's optimal, profit-maximizing output given its rival's output.
A) price leadership decision
B) reaction function
C) collusive response
D) dominant strategy

Question

Quizplus · Accepted Answer

The Cournot model's reaction function represents how each firm adjusts its output to maximize profits based on the output level of its competitor, indicating the strategic interdependence in oligopolistic markets.

In the Cournot Model, Each Firm's ________ Shows the Firm's