In the simplest version of the Cournot model, we assume

Question

Quizplus · Accepted Answer

In the simplest version of the Cournot model, it is assumed that the firms have identical costs. Therefore, the correct answer is C. Option A is incorrect because firms in the Cournot model are assumed to set their quantity (output) independently, not price. Option B is incorrect because the firms still set their quantities independently and simultaneously, not sequentially. Option D is incorrect because being in a Nash equilibrium is not an assumption of the Cournot model but rather a possible outcome depending on the firms' strategies.

In the Simplest Version of the Cournot Model, We Assume