Which of the following best describes the Cournot equilibrium in an oligopolistic market?
1
Each firm adjusts its output until it maximizes its own profit, assuming the output of rivals is fixed.
2
Firms engage in price leadership to achieve equilibrium.
3
Firms form a cartel to maximize joint profits by reducing output.
4
Each firm sets prices higher than marginal cost to maximize collective profits.
5
Question Not Attempted