The inverse demand for a homogeneous-product Stackelberg duopoly is P = 20,000 5Q. The cost structures for

Question:

The inverse demand for a homogeneous-product Stackelberg duopoly is P = 20,000 –5Q. The cost structures for the leader and the follower, respectively, are CL(QL) = 3,000QL and CF (QF) = 4,000QF.
a. What is the follower’s reaction function?
b. Determine the equilibrium output level for both the leader and the follower.
c. Determine the equilibrium market price.
d. Determine the profits of the leader and the follower.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: