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In the Stackelberg model of oligopoly, why doesn't the leader change its output level? A. The leader is nave and does not know its own
In the Stackelberg model of oligopoly, why doesn't the leader change its output level?
A. The leader is nave and does not know its own reaction function
B. The leader need not take the economics into account because it is the leader and economics do not apply to leaders
C. The leader knows that if it can hold firm to its production decisions the follower will as well and the leader can take more profit relative to the Cournot model even though industry profit is lower
D. In this model there is no profit wo the output level does not matter.
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