Stackelberg duopolists, Firm 1 and Firm 2, face inverse market demand P = 50 Q. Both

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Stackelberg duopolists, Firm 1 and Firm 2, face inverse market demand P = 50 – Q.

Both have marginal cost, MC = S20. Finn 1 produces output Qi = 15 and Finn 2 produces output Q2= 7.5. What is the price level in this market and what is the level of industry profits (i.e., the sum of Finn 1 and Firm 2's profits)?

a) P = 27.5; industry profits = 168.75

b) P = 30; industry profits = 172.6

c) P=32.5; industry profits = 1804

d) P=34; industry profits = 184.24

Related Book For answer-question

Environmental Economics and Management Theory, Policy and Applications

ISBN: 978-1111826673

6th edition

Authors: Scott J. Callan,Janet M. Thomas

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Posted Date: Mar 14, 2019 10:11 AM

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Stackelberg duopolists, Firm 1 and Firm 2, face inverse market demand P = 50 Q. Both

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The correct answer is a P 275 industry profits 16875 ... View the full answer

Environmental Economics and Management Theory, Policy and Applications

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