In the Cournot model, each firm's reaction function shows the firm's ________ as it depends on its rival's output.
A) break-even output
B) optimal, profit-maximizing output
C) minimum cost
D) marginal revenue

Question

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In the Cournot model, each firm's reaction function represents its optimal, profit-maximizing output level based on the output level of its competitor. This strategic interaction is key to understanding how firms compete in quantities.

In the Cournot Model, Each Firm's Reaction Function Shows the Firm's