Implications
- Output is greater with Cournot duopoly than monopoly, but lower than perfect competition.
- Price is lower with Cournot duopoly than monopoly, but not as low as with perfect competition.
- According to this model the firms have an incentive to form a cartel, effectively turning the Cournot model into a Monopoly. Cartels are usually illegal, so firms might instead tacitly collude using self-imposing strategies to reduce output which, ceteris paribus will raise the price and thus increase profits for all firms involved.
Read more about this topic: Cournot Competition
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