Question

Which of the following statements is correct? a. The Bertrand model is a game involving two identical firms, producing identical products at a constant marginal (and average) cost, and, simultaneously, choosing prices. b. The Cournot model is similar to the Bertrand model except that firms are assumed to simultaneously choose quantities rather than prices. c. The Stackelberg model is similar to a duopoly version of the Cournot model except that—rather than simultaneously choosing the quantities of their identical outputs—firms move sequentially, with the leader choosing its output first and the follower choosing after observing the leader’s output. d. All of the above.

Answer 1

d. All of the above

Cournot, Bertrand and Stackelberg models are different versions of duopoly model.
In cournot model, output is determined simultaneously.
In stackelberg model, firms move sequentially.
In bertrand model, identical firms producing identical products have identical marginal and average cost and they determine price simultaneously.