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Cournot Competition
A model of oligopoly in which firms compete on the quantity of output they decide to produce, assuming that each firm's output decision affects the market price.
Implications
An economic model describing an industry structure where firms compete on the quantity of output they produce, with each firm�s output decision affecting the market price, often used to analyze oligopolies.
Example
Example: Two oil companies in an oligopolistic market engage in Cournot competition, each deciding on the quantity of oil to produce, knowing that their decisions will impact the overall market price.
Related Terms
Different from Bertrand competition, where firms compete on price, Cournot competition focuses on quantity decisions and their impact on market dynamics.
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