-Figure 8.1 depicts the market demand for the product produced by n firms producing an identical product in which MC = 0 for each firm. If Q' = 5,000 and there are 99 firms in the industry, total industry output according to the Cournot model is:

Question

Quizplus · Accepted Answer

In the Cournot model, each firm assumes the output of the other firms is fixed and chooses its output to maximize profit. With 99 firms and Q' = 5,000, the total industry output is calculated as (n/(n+1)) * Q' = (99/100) * 5,000 = 4,950 units.

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