The Cournot equilibrium occurs in an oligopoly market when

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    each firm correctly assumes how much the other firm is producing and so are producing at the level of output where their reaction curves intersect.
     each firm produces at the output level they believe to be profit maximizing given the reaction they expect from their rival firms.
     each firm produces at the output level they believe to be profit maximizing given the uncertainty of what its competitor is producing.
     Both 2 and 3.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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each firm correctly assumes how much the other firm is producing and so are producing at the level of output where their reaction curves intersect.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)



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