Cournot Duopoly Graph - Demand, Marginal Cost, and Output Equilibrium #195784 (License: Personal Use)

The diagram displays two downward-sloping demand curves-P₁ = 10 - Q₁/500 - Q₂/500 and P₂ = 10 - Q₂/500 - Q₁/500-intersecting a horizontal marginal cost (MC) line at $2. Key points A (1,900 units) and B (2,500 units) mark optimal outputs under varying competitor behavior, with Q₂ = 0 indicating Firm 2’s absence.

Used in intermediate microeconomics courses and textbooks to explain strategic output decisions in oligopolistic markets; supports learning about Nash equilibrium in quantity competition (Cournot model).