Multiple Choice
Suppose the outboard motor market is characterized by Stackelberg competition. The market inverse demand curve for outboard motors is P = 10,000 - 50Q, where Q is the total market output produced by Mercury Marine and Yamaha, qM + qY. Suppose that the marginal cost for both firms is constant at $1,000. If Yamaha is the first-mover, what is the equilibrium price?
A) $1,800
B) $2,600
C) $3,250
D) $4,000
Correct Answer:
Verified
Correct Answer:
Verified
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