Comparative Statics in Free Entry Cournot Equilibrium.

We study the effects of a change in some exogenous variable (the fixed cost or a parameter in the payoff functions) on the strategies played in a Symmetric Cournot Equilibrium with Free Entry (SCEFE). We also show that any observation on prices, profits and number of firms is compatible with the assumption that the market under consideration is a SCEFE. Therefore, in this model, there is no direct link between profitability and the number of active firms.