Now suppose the two firms engage in Stackelberg market competition.

Assume firm 1 is the leader (first-mover) and firm 2 is the follower firm (second-mover).

Marginal profit function of Stackelberg leader: 1500 - 2Q1

What will be the equilibrium output level produced by the Stackelberg leader (first-mover) firm?

Group of answer choices

1250

900

750

500

What will be the equilibrium output produced by the Stackelberg follower (second-mover) firm?

Group of answer choices

375

250

450

600

What will be the market price in this Stackelberg model?

Group of answer choices

850

725

675

950

Can you calculate the profit earned by the Stackelberg leader and the Stackelberg follower?

Group of answer choices

$525,000 and $275,000

$562,500 and $281,250

$475,000 and $325,000

$510,000 and $280,000