Cournot Model

Cournot's Model is among the earliest attempts to analyse the price and output decision – market process under duopoly, but its conclusions are equally applicable to oligopolistic market situations, markets with more than two interdependent decision – making firms.
Cournot’s modern is based upon the following assumptions:

• There are only two producers producing identical products.
• Both the producers have indentical costs.
• Each producer decides his own profit maximizing level of output on the assumption that his competitor will not change his own level of output.