Question
An industry has two firms, a leader and a follower. The demand curve for the industry's output is given by p = 100 5q,
An industry has two firms, a leader and a follower. The demand curve for the industry's output is given by p = 100 5q, where q is total industry output. Each firm has zero marginal cost. The leader chooses his quantity first, knowing that the follower will observe the leader's choice and choose his quantity to maximize profits, given the quantity produced by the leader. What output will the leader choose?
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Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968
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