DSE 2004

[Meghanjalli Routh]

In the question number 9 how do we conclude if the cournot outcome is pareto efficient from the point of view of the two firms?

[Devika]

Because both the firms can do better and earn greater profits if they collude. Hence, cournot outcome is not PE.

[Devika]

They can do much better in case of monopoly.

[Abhyudaya]

Hi Devika...Could u telll if we shud find the cartel profit or monoply profit to compare wid
cournot equibrium...Means wid whom we should compare if we want to know cournot equilibrium  is more efficient...