Firm 1 supplies more than firm 2 Firm 1 supplies less than firm 2 Firm 1 and firm 2 supply identical quantities. We cannot determine which firm supplies more. QUESTION 8 Consider a standard Stackelberg environment. Two firms produce a homogenous good. The total demand is Q - A - BP, where P is the market clearing price. Firm / faces the following cost function: TC(q,) - Mq, + F. Firm 1 chooses the quantity to supply first. Firm 2 chooses how much to supply after observing the quantity supplied from firm 1. In this environment, Total quantity suppled is larger than a monopoly market with an identical total cost function Total quantity suppled is smaller than a monopoly market with an identical total cost function Total quantity suppled is the same as a monopoly market with an identical total cost function The market clearing price is the same as the price in a monopoly market with an identical total cost function QUESTION 9 10 Consider the following Stackelberg duopoly. Both firms produce a homogenous good. Firm 1 chooses how much to supply first. Firm 2 chooses how much to supply after observing the quantity supplied by firm 1. The market demand is @ - 50 - P. For firm 1, the marginal cost of production is 6. For firm 2, the marginal cost of production is 10. the firms do not face any fixed costs. What function describes the reaction of firm 2 to the observed quantity produced by firm 1? Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers DIY CH 6 9086