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Suppose that demand is given by P(Y) - 20 -Y costs for the leader are given by co (un) = byt and costs for the

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Suppose that demand is given by P(Y) - 20 -Y costs for the leader are given by co (un) = byt and costs for the follower are given by Set up the follower profit maximization problem (+ 3) Find the followers first order conditions (+ 3) Find the follower's best output conditional on what the leader does -a) Set up the leader's profit maximization accounting for the follower best response - 4 Write down the first order conditions for the leader's problem (-B) Find the leader's optimal output (--2). followers optimal output ( 1), and market price # 3)

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