Economic question

1. Consider a Stackelberg game of quantity competition between two rms. Firm 1 is the leader and rm 2 is the follower. Market demand is given by P = 1000 3Q. Each rm has a constant marginal cost of production equal to 10. a Solve for rm 2's best reply to rm 1's output choice. b (c (d What are each rm's prots? By how much does rm 1 benet by being the leader relative to the Cournot duopoly outcome? ( [ Given rm 2's best reply, solve for rm 1's optimal output. Derive the equilibrium price. ) ) ) )