Question

In Cournot equilibrium with two firms and zero marginal cost, each firm supplies what fraction of market demand?

Options

• 1/2

• 1/3

• 1/4

• 1/4 total

Answer 1

1/3

Explanation:

Equilibrium results in each firm supplying 1/3, with 1/3 of market unsupplied due to reaction process.