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Please give explanation Consider a Stackelberg game played by 3 firms: firm 1 moves first, then firm 2, and finally firm 3. Inverse demand is
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Consider a Stackelberg game played by 3 firms: firm 1 moves first, then firm 2, and finally firm 3. Inverse demand is p = 11 - Q where Q = q1 + 92 + 93. All firms face the same constant marginal costs c = 1 . Identify the problem firm 1 solves in this game. O max (11 - 91 ) 91 41 max (11 - q1 - 92 (91 ) - 93 (91 , 92 (91 ) ) )q1 - 91 91 where q3 (91, q2 ) is a function of q1 and q2, and q2 (q1 ) is a function of q1 O max (11 - q1 - 92 - 93 ) 91 - 91 91 where q1 (q2 ) and q3 (92) are function of q2 O max (11 - 91 - 92 (91 ) - 93 (92 ) )q1 - 91 41 where q2 (q1 ) is a function of q1, and 93 (91 ) is a function of q2Step by Step Solution
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