Chapter 14: Oligopoly 1
23.Explain how the outcome of the Cournot model is achieved.
24.An essential assumption of the Cournot model is that each firm aims to maximize profits, based on the expectation that its own output decision will not have an effect on the decisions of its rivals. Critically evaluate this assumption.
25.In choosing the optimal output, the monopolist had only to consider its own costs and the demand curve that it faced. How do things change under duopoly and what does the Cournot model argue about how firms will behave?
26.What is the output level predicted by the Cournot model? Discuss this in terms of the different market models that have been surveyed so far.
27.Evaluate the following statement. The Cournot model basically assumes that the sole decision of each firm in a duopoly is one of determining how much to produce not which price to set.
28.What is price leadership?
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