Cournot competition is an economic model used to describe an industry structure in which companies compete on the amount of output they will produce, which they decide on independently of each other and at the same time. It is named after Antoine Augustin Cournot (1801–1877) who was inspired by observing competition in a spring water duopoly. It has the following features:
There is more than one firm and all firms produce a homogeneous product, i.e. there is no product differentiation;
Firms do not cooperate, i.e. there is no collusion;
Firms have market power, i.e.
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