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Suppose Duopolists Face the Market Inverse Demand Curve P =

Question 2

Multiple Choice

Suppose duopolists face the market inverse demand curve P = 100 - Q,Q = q1 + q2,and both firms have a constant marginal cost of 10.If firm 1 is a Stackelberg leader and firm 2's best response function is q2 = (100 - q1) /2,at the Nash-Stackelberg equilibrium firm 2's output is


A) 30.
B) 40.
C) 60.
D) 70.

Correct Answer:

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