In the Cournot model:
A)firms choose quantities.
B)firms minimize costs.
C)firms produce what the government tells them to.
D)firms choose prices.

Question

Quizplus · Accepted Answer

In the Cournot model, firms choose quantities to produce. Each firm assumes that its competitors' quantities remain constant, and then chooses the quantity that maximizes its own profit. This results in an equilibrium where each firm produces a quantity that is a best response to the other firms' quantities.

In the Cournot Model