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.

Answer rating: 100% (QA)

1 Eyeones Output Level Q1 as the Leader Stackelberg Eyeone as the leader in the Stackelberg duopoly ... View the full answer