Describe the Cournot and the Bertrand models. Discuss the main critics to both models.
The Cournot model is an oligopoly model in which businesses produce a uniform good and assume that the output of their rivals is fixed when determining how much to produce.Businesses that produce identical goods but engage in price competition and simultaneous pricing decisions are taken into account by the Bertrand model. . According to the economic theory of Cournot competition, competing firms select a production volume independently and concurrently. These three models offer different ways to visualize oligopolistic behavior. The Bertand model produces a price war and competitive prices, making it relatively simple to spot in the real world.
Step by step
Solved in 2 steps
