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An industry is characterized by competition a la Stackelberg. Market demand is given by p = 500 - y 1 - y 2 . Firm

An industry is characterized by competition a la Stackelberg. Market demand is

given by p = 500 - y₁ - y₂. Firm 1 is the leader, while firm 2 is the follower. The cost

total of firm 1 is C₁ (y₁) = 30 y₁²

The total cost of firm 2 is C₂ (y₂) = 60 y₂²

. Find the price and quantities at Stackelberg equilibrium.

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