Question
Assume there are 2 firms in the market. The market demand is given by Q = 53 - P where, Q = Q1 + Q2.
Assume there are 2 firms in the market. The market demand is given by Q = 53 - P where, Q = Q1 + Q2. Both firms have the same average and marginal costs, AC = MC = 5.
(a)If firm 1 is the Stackelberg leader, derive the algebraic function that depicts the reaction curves for each firm?
(b)How much will each firm produce? What will each firm's profit be?
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Economics for Environmental Studies A Strategic Guide to Micro and Macroeconomics
Authors: Alfred Endres, Volker Radke
1st edition
364231192X, 3642311925, 9783662548264, 3662548267, 978-3642311925
