So long as production in the oligopoly still occurs, recurring fixed costs have no impact on output under Cournot competition but do have an impact under Bertrand competition.

Question

Quizplus · Accepted Answer

Recurring fixed costs do not affect output under Cournot competition because firms set their output levels based on the assumption that their rivals' output will remain constant. Under Bertrand competition, however, firms set their prices based on the assumption that their rivals' prices will remain constant. As a result, recurring fixed costs can affect output under Bertrand competition because they can affect the firms' profit margins.

So Long as Production in the Oligopoly Still Occurs, Recurring