12.2.1 The Cournot Model Reaction curve-Relationship between a firm's profit-maximizing output and the amount it thinks its competitor will produce. Cournot equilibrium-Equilibrium in the Cournot model, in which each firm correctly assumes how much its competitor will produce and sets its own production level accordingly. 12.2.1 The Cournot Model  Reaction curve - Relationship between a firm’s profit-maximizing output and the amount it thinks its competitor wi1l produce.  Cournot equilibrium - Equilibrium in the Cournot model, in which each firm correctly assumes how much its competitor will produce and sets its own production level accordingly