Cournot Model In Oligopoly Market

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There are 3 theories of economics will be discussed in this chapter. These theories of economics will be discussed are Cournot Model in Oligopoly Market, Prisoner Dilemma in Game Theory and XXX. First of all, I will discuss what is Oligopoly Market and Cournot Model in Oligopoly Market. Besides that, these theories were applied during my internship program in Brunsfield Trading Sdn Bhd.
3.1.1 Cournot Model in Oligopoly Market
Oligopoly market is a market which have only few firms compete with one another. The products of oligopoly market might or might not differentiated such as automobile is differentiated and steel is not differentiated. There are barriers for new firms to enter oligopoly market. Examples of oligopolistic industries are steel, aluminium, petrochemical, automobiles and computers. Some of the reasons for barriers to entry arise in oligopolistic industries such as scale economics, patents or access to a technology, market reputation and etc. Oligopolistic industries was
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In the figure 2 shown that demand curve shift to the left from D1 (0) to D1 (50). In the same time, the corresponding marginal revenue also will shift to left and label as MR1 (50). Now the profit-maximizing output of Firm 1 becomes 25units where MR1 (50) intersects with MC1. Now, suppose Firm 1 assume Firm 2 will produce 75 units. Demand curve of firm is the market demand curve was shifted to left by 75. In the figure showed that demand curve shift to left as D1 (75) and the corresponding marginal revenue shifted to MR1 (75). The profit-maximizing output of Firm 1 is 125 unit where where MR1 (75) intersects with MC1.
Finally, firm 1 will assume firm 2 produce 100 units. The demand curve of firm 1 and marginal revenue curve will intersect on vertical axis which are not shown in Figure 2. If firm 1 assumes firm 2 produce 100 units or more than that, firms 1 should produce
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