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Microeconomics II
book

Microeconomics II

by D.N. Dwivedi
August 2011
Intermediate to advanced content levelIntermediate to advanced
368 pages
14h 51m
English
Pearson India
Content preview from Microeconomics II
Price and Output Determine Oligopoly 119
First, Cournot’s behavioural assumption, specically the assumption that sellers assume that the
rival rm will not change its output is said to be naive as it implies that rms continue to make wrong
calculations about the behaviour of the rival rms even though their calculations are proved wrong. For
example, each seller continues to assume that his rival will not change his output even though he nds
frequently that his rival does change his output.
Secondly, Cournot assumed zero cost of production, which is not realistic. However, even if his
assumption is dropped and a ...
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Publisher Resources

ISBN: 9788131797655