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4. Two firms (A and B) produce a homogenous product and compete in output. The firms both have a constant marginal production cost of 4
4. Two firms (A and B) produce a homogenous product and compete in output. The firms both have a constant marginal production cost of 4 and the inverse demand function is P(Q)=1962Q, where Q is total industry output. Suppose that Firm A chooses its output first. Firm B observes Firm A's output and then chooses its own output. What are the subgame perfect Nash equilibrium output levels of firms A and B, respectively? A. 36&18 B. 40&20 C. 48&24 D. 56&28 E. 64&32
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