Advanced Micro · intro
What moves on the Cournot Competition diagram
A bigger market shifts both best-response curves outward, outputs rise for both rivals in equilibriumequilibriumThe point where opposing forces balance, quantity supplied equals quantity demanded, so there's no pressure for price to change..
Both reaction curves cross at the Nash point.
The market grows, each firm's best response rises for any rival output.
Both curves shift out; the new Nash equilibriumNash equilibriumA strategy profile where no player can gain by changing their choice alone. has both firms producing more.
Examiners ask this as: duopoly demand grows, both firms expand.
Other scenarios on Cournot Competition