Explanation : The Cournot model describes a special case of Nash equilibrium, in
which no firm can increase profits by changing its price/output choice.
Kinked demand curve: Price at the kink in demand function. Dominant
firm: Price at the quantity where MR = MC. Followers take the leader’s
price.
Explanation : As prices decrease, smaller firms will leave the market rather than sell
below cost. The most likely scenario is that Engro (market leader) will
decrease prices and its market share will increase.