Question

The amount of output produced by two firms in a Cournot oligopoly setting is greater than that

produced by a monopoly, but smaller than that which would be produced if the market were

perfectly competitive. Is this true or False and why?

Answer 1

False. Because in cournot oligopoly which also called cournot duopoly is in which therevare two firm having same cost function and who choose output simultaneously. So the market or we can say the consumers are low than other market also they have choice of two seller. Whether in monopoly there is only one seller selling product so he can sell the amount which can be fulfill the demand of the qhole market. But in perfect competition there are large no.of buyers so as sellers so they do not have reasons to produce or sell much.