When a new firm begins production in the ________ model, it assumes its demand curve is the market demand less the amount the other firm is selling.
A) Cournot
B) collusion
C) cartel
D) price leadership

Question

Quizplus · Accepted Answer

In the Cournot model of oligopoly, each firm assumes that its competitors will hold their output constant and then decides its own production level based on this assumption. This involves considering the market demand less the quantity supplied by competitors.

When a New Firm Begins Production in the ________ Model