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Two Firms Compete as a Stackelberg Duopoly

Question 73

Multiple Choice

Two firms compete as a Stackelberg duopoly.The inverse market demand they face is P = 62 − 4.5Q.The cost function for each firm is C(Q) = 8Q.The outputs of the two firms are:


A) QL = 48; QF = 24.
B) QL = 35; QF = 6.
C) QL = 6; QF = 3.
D) None of the preceding answers is correct.

Correct Answer:

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