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Question 5 . Consider a Stackelberg game of quantity competition between two rms. Firm 1 is the leader and rm 2 is the follower. Market

Question 5

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. Consider a Stackelberg game of quantity competition between two rms. Firm 1 is the leader and rm 2 is the follower. Market demand is described by the inverse demand P=1000-4Q. Each rm has a constant unit cost of production equal to 20. A. Solve for the Subgame perfect equilibrium. B. Suppose firm 2's unit cost of production is c

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