Suppose the demand curve for soda pop is given by P = 820 – 2Q. In this industry, Coca Cola is the Stackelberg leader and Pepsi is the Stackelberg follower. Suppose marginal cost for each firm is $80. Solve for optimal output and resulting profit for each firm.

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Solving for Optimal Output and Profit in a Stackelberg Model Step 1 Pepsis Reaction Function Firstwe ... View the full answer