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Problem 4. Stackelberg Competition Suppose the market of fried chicken is dominated by two oligopolists: Macdonald and KFC. The inverse demand function is: P=20-Q. Production
Problem 4. Stackelberg Competition
Suppose the market of fried chicken is dominated by two oligopolists: Macdonald and KFC.
- The inverse demand function is: P=20-Q.
- Production cost of Macdonald is: 2Qm 2 .
- Production cost of KFC is: Qk .
Suppose Macdonald is the first mover. Find the equilibrium of the Stackelberg game.
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