Answer to Question 2:

Under Cournot equilibrium, the individual firms' demand curves necessarily cross through their corresponding demand curves at the collusive output level.

True or False?


The statement is false. As noted in the Lesson, the deviant firm's demand curve crosses through the collusive demand curve at the collusive output level because that firm is choosing to vary its output around its collusive level. The level of the Cournot equilibrium demand curve will depend on the Cournot equilibrium output levels of the remaining firms and will not necessarily pass through the collusive demand curve at the collusive output level.

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