Economics · Oligopoly

Consider the Cournot duopoly model with identical firms and linear demand. Which of the following statements are correct? 1. Each firm assumes rival output is fixed. 2. Reaction functions are downward sloping. 3. Nash equilibrium total output equals monopoly output. 4. Market price exceeds marginal cost.

Verified Solution4 OptionsUpdated: October 2026👁️1 View

11, 3 and 4 only
22 and 3 only
31, 2 and 4 only✓
41 and 2 only

Correct answer

1, 2 and 4 only

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