Which of one the following statements is correct? A.The Cournot model is simply wrong because in the real world firms do make pricing decisions. B.Only the Bertrand model can be right because in the real world firms do make pricing decisions. C.The Cournot model can be justified as a reduced form of a dynamic game in which firms make decisions on quantities, which are followed by pricing decisions. D.The Cournot model are justified because in all real world markets there are auctioneers who play the function of clearing the markets.

The Cournot model is applicable when firms produce identical goods. Firms do take quantity decisions…

Answered: Which of one the following statements…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of one the following statements is correct?

	A.	The Cournot model is simply wrong because in the real world firms do make pricing decisions.
	B.	Only the Bertrand model can be right because in the real world firms do make pricing decisions.
	C.	The Cournot model can be justified as a reduced form of a dynamic game in which firms make decisions on quantities, which are followed by pricing decisions.
	D.	The Cournot model are justified because in all real world markets there are auctioneers who play the function of clearing the markets.

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