short-run vs long-run  

• few firms in the beginning >> economic profits
• more firms enter in long run >> price = marginal cost
  • each firm's output/price decreases
  • overall industry output increases

Cournot equilibrium - firms make decision all at the same time  

• found at the intersection of the 2 firm's reaction curves
  • gives respective quantities produced by the 2 firms (in duopoly case)
• identical firms (identical cost functions) >> same output from each firm
  • q1 = q2
  • plug into reaction functions to find how much each firm produces

Bertrand model - prices decided by firms simultaneously  

• assume the good to be homogeneous
• follows rules of competitive equilibrium
  • P = MC
• homogeneous good >> consumer only cares about price
  • firm charges too much >> can't sell anything
  • will assume that other firms behave the same way >> act as if in a competitive equilibrium