Cournot Economics

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…so will the profit-maximizing price. The higher price will allow firms to produce less, actually firms will naturally produce less, lowering costs of production and increasing profits. The increasing prices and decreasing quantities are caused by product differentiation, which affects a market in a similar way to a monopoly. Taken to the extremes of absolute differentiation, each firm will have created an entirely new market. Furthermore, that firm will have monopoly control of that market.