Identify the truthfulness of the following statements.
I. Cournot firms do not attain the monopoly or collusive equilibrium.
II. The equilibrium output in a Cournot oligopoly market does not maximize industry profit.
A) Both I and II are true.
B) Both I and II are false.
C) I is true; II is false.
D) I is false; II is true.

Question

Identify the truthfulness of the following statements. 
I. Cournot firms do not attain the monopoly or collusive equilibrium.
II. The equilibrium output in a Cournot oligopoly market does not maximize industry profit.
A) Both I and II are true.
B) Both I and II are false.
C) I is true; II is false.
D) I is false; II is true.

Quizplus · Accepted Answer

In a Cournot oligopoly, firms choose quantities independently, leading to an equilibrium that is not the same as a monopoly or collusive outcome, which would maximize industry profit. Thus, both statements are true.

Identify the Truthfulness of the Following Statements