-Figure 8.1 depicts the market demand for the product produced by n firms producing an identical product in which the marginal cost of production for each firm is MC = 0. According to the Cournot model, total industry output is (Q_T) is given by the equation:

Question

Quizplus · Accepted Answer

In the Cournot model, when n firms are producing an identical product with a marginal cost of MC = 0, the total industry output is given by the formula nQN/(n + 1), where QN represents the market demand. This formula accounts for the strategic interaction between firms, where each firm considers the output levels of its competitors when deciding its own output level.

-Figure 81 Depicts the Market Demand for the Product Produced by by N