<p>Producing more will decrease the price and therefore the profit per unit sold. For a monopolist, all units are their own units. For a duopolist, many units will be the competitor's units.</p>

<p>Viewed differently, producing more produces an externality between producers via prices in a duopoly. A monopolist internalizes these externalities completely. </p>

CC BY-SA 4.0
2018-05-12T20:41:25.033Z
2018-05-12T20:41:25.033Z
Michael Greinecker
<p>I am just wondering if someone could explain the descriptive, not mathematical intuition behind why a cournot equilibrium for a duopoly produces a higher level of output than a monopolist but lower level of output than a perfectly competitive maket?</p>

<p>I can understand why a cournot model with many firms would result in a perfectly competitive outcome but why would a duopoly necessarily result in a more efficient outcome than a monopoly?</p>

<p>Thanks in advance</p>

<microeconomics><industrial-organisation><nash-equilibrium><oligopoly>
Intuition behind a cournot duopoly nash equilibrium producing a higher output than a monopoly?
ftse420
# Intuition behind a cournot duopoly nash equilibrium producing a higher output than a monopoly?

(Asked by: username_0 on 2018-05-12)

I am just wondering if someone could explain the descriptive, not mathematical intuition behind why a cournot equilibrium for a duopoly produces a higher level of output than a monopolist but lower level of output than a perfectly competitive maket?

I can understand why a cournot model with many firms would result in a perfectly competitive outcome but why would a duopoly necessarily result in a more efficient outcome than a monopoly?

Thanks in advance

**Tags:** microeconomics, industrial-organisation, nash-equilibrium, oligopoly

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## 1 answers

### Answer by username_1 on 2018-05-12. Score: 1

Producing more will decrease the price and therefore the profit per unit sold. For a monopolist, all units are their own units. For a duopolist, many units will be the competitor's units.

Viewed differently, producing more produces an externality between producers via prices in a duopoly. A monopolist internalizes these externalities completely.


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