Consider a Stackelberg Duopoly with the Following Inverse Demand Function

Multiple Choice

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q₁ - 2Q₂. The firms' marginal costs are identical and are given by MC_i = 2. Based on this information, the Stackelberg leader's reaction function is:

A) Q_L = 24.5 - 0.5Q_F.
B) Q_L = 50 - 0.5Q_F.
C) Q_L = 49 - 0.5Q_F.
D) None of the answers is correct.