Question: The market demand function is Q 1 000 1 000p
The market demand function is Q = 1,000 – 1,000p. Each firm has a marginal cost of m = 0.28 (28¢ per unit). Firm 1, the leader, acts before Firm 2, the follower. Solve for the Stackelberg equilibrium quantities, prices, and profits. Compare your solution to the Nash-Cournot equilibrium.
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