Cournot Model Quiz

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$p(q) = \max{a - q, 0}$

$S_i = \mathbb{R}^+$

$\pi_i(q_i, q_j) = p(q_i+q_j)q_i - cq_i$

<p>$\frac{{\partial\pi_i}}{{\partial q_i}} (q_i, q_j) = 0 \Rightarrow a - 2q_i - q_j - c = 0$</p> Signup and view all the answers

<p>To maximize profit</p> Signup and view all the answers

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The inverse demand function in the Cournot model is a function that specifies the market-clearing price as a function of the total quantity supplied by all firms.
The strategy space in the Cournot model consists of the set of possible output levels that each firm can choose.

The payoff function for firm $i$ in the Cournot model represents the profit of firm $i$, typically measured as revenue minus cost.
The objective of the firms in the Cournot model is to maximize their profit by choosing the optimal output level, given the output levels of other firms.

The first-order condition for firm $i$ in the Cournot model is a necessary condition for the optimal output level, which requires the marginal revenue of firm $i$ to equal its marginal cost.