Under a Cournot equilibrium, each firm will produce:
A)the same output as a monopolist.
B)as much output as possible.
C)as little output as possible.
D)the same output as each other firm.

Question

Quizplus · Accepted Answer

Under Cournot equilibrium, each firm produces the quantity that maximizes its profit given the output of its competitors. This results in each firm producing the same quantity as its competitors, leading to a situation where all firms produce the same output. Hence, the correct choice is D, which states that each firm produces the same output as each other firm.

Under a Cournot Equilibrium, Each Firm Will Produce