Multiple Choice
Which of the following is a necessary condition for government subsidies to influence a firm to choose an output level as if it were a Stackelberg leader?
A) The subsidy must be announced before the firms choose output levels.
B) The subsidy must be equal to the firm's marginal cost.
C) The subsidy must be equal to the firm's rival's marginal cost.
D) The firm does not have any fixed costs.
Correct Answer:
Verified
Correct Answer:
Verified
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