Conjectural variation is a term used in oligopoly theory referring to the beliefs that one firm has about the way its competitor(s) may react if it varies its output (or price). The firm forms a conjecture about the variation in the other firm's output that will accompany any change in its own output.
conjectural variation meaning:[Economics] A proposed approach to the problem of how equilibrium is reached under oligopoly . Instead of Cournot competition, where each firm takes the others' outputs as given, or Bertrand competit...