Eyeone and SafetyTwo are a cournot duopoly. Inverse demand function of P=160-2Q where total output is Q=Q1+Q2,
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Eyeone and SafetyTwo are a cournot duopoly. Inverse demand function of P=160-2Q where total output is Q=Q1+Q2, Eyeone (Q1) SafetyTwo(Q2). Monthly cost is estimated as C=4Q for both. Eyeone is considering making a monthly investment of $200. If their campaign is successful they will steal market share and become the leader the leader (Stackleberg).
Stackelberg:
1. What is eyeone's output level?
2. what is eye one's price?
3. what is eyeone's profit?
4. Should eye one move forward with $200 monthly investment? Explain.
Related Book For
Managerial Economics And Strategy
ISBN: 9780134899701
3rd Edition
Authors: Jeffrey M. Perloff, James A. Brander
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