A significant criticism of the Cournot model is that:
A)markets do not operate according to the Cournot model in the real world.
B)its key assumption does not hold if the market is still adjusting toward equilibrium.
C)firms cannot estimate reaction curves of other firms.
D)the Cournot model cannot be applied to industries with more than two firms.

Question

Quizplus · Accepted Answer

The Cournot model assumes that firms' production levels are fixed and do not change in response to changes in the market, but in reality, markets are constantly adjusting towards equilibrium. This undermines the validity of the model.

A Significant Criticism of the Cournot Model Is That