The equilibrium output in a Cournot oligopoly market does not maximize industry profit.

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The equilibrium output in a Cournot oligopoly market is determined by each firm producing its profit-maximizing quantity given the output of the other firms. This results in a quantity that is less than the perfectly competitive quantity and a price that is greater than the marginal cost. As a result, industry profit is less than the maximum possible. In a Cournot oligopoly market, firms decide on quantity of output to produce rather than price. The equilibrium output is determined where each firm's marginal revenue equals their marginal cost, and therefore the market price is also determined. However, this quantity is typically lower than the level of output that would maximize industry profit (i.e. the level of output where industry marginal revenue equals industry marginal cost). As a result, the Cournot equilibrium output does not maximize industry profit.

The Equilibrium Output in a Cournot Oligopoly Market Does Not