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Cournot model of competition

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a) In the Cournot model of competition the best response of an incumbent firm to
the entry of a new firm is to reduce output. Explain why this is so.

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In the Cournot model of competition the best response of an incumbent firm to
the entry of a new firm is to reduce output. Explain why this is so.

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The Cournot Model of competition is an economic model that takes into account two companies that produce a homogenous product. In other words, the model attempts to predict the behavior of two businesses that make up a given market. The duo firms involved try to decide the quantity of the goods ...

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Edwin Sinclar, MBA
Education
  • MBA, Aspen University
  • Bachelor of Science , Berea College
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