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Suppose a firm has to decide between entering one of two markets. In one market it would be the follower in a Stackelberg (sequential quantity
Suppose a firm has to decide between entering one of two markets. In one market it would be the follower in a Stackelberg (sequential quantity setting). In the other market, it would be the third firm in a Cournot (simultaneous quantity setting). The formula to find the quantity produced by each firm in a Cournot setting is: = ( + 1) Assume that there is the same linear inverse demand curve and constant marginal cost in each market (just like the examples we did in class). Which industry would a firm choose to enter? Or would the firm be indifferent to which industry it enters? Explain
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