Final answer:
The statement is false; Cournot assumes firms independently choose quantities without collaboration, Stackelberg has a leader-follower dynamic in quantity decisions, and Bertrand involves independent price setting, not quantity.
Step-by-step explanation:
The statement is false. In oligopoly models, not all firms independently choose the quantity of output to produce. Specifically:
In the Cournot model, firms independently choose quantities, and each firm makes its decision regarding output quantity with the assumption that the other firm's quantity will remain constant.
The Stackelberg model assumes a leader-follower dynamic. Here, the leader firm chooses its quantity first, and the follower firm then decides its quantity knowing the leader's quantity.
In the Bertrand model, firms compete by setting prices rather than quantities. They independently set prices, with the assumption that the competitor's price will stay fixed.
The oligopoly market structure has room for only a few firms due to barriers to entry resulting from economies of scale and market demand. Oligopolists may face the temptation to produce more for a greater market share, leading to behavior similar to a highly competitive market or, conversely, they might collude and act like a monopoly, leading to higher profits.