The oligopoly model in which each firm assumes that rivals will continue to produce at their current output levels is called the:
A)Cournot model
B)Bertrand model
C)Stackelberg model
D)Chamberlin model

Question

Quizplus · Accepted Answer

In the Cournot model, each firm assumes that rivals will continue to produce at their current output levels, and the firms compete on output rather than price. Therefore, this statement describes the Cournot model. The Bertrand model assumes that firms compete on prices rather than quantities, and the Stackelberg model assumes that one firm (the leader) sets its output first, followed by the followers. The Chamberlin model assumes that firms differentiate their products to some degree.

The Oligopoly Model in Which Each Firm Assumes That Rivals