Question
The inverse demand for a homogeneous-product Stackelberg duopoly is P = 14,000 -5 Q. The cost structures for the leader and the follower, respectively, are
The inverse demand for a homogeneous-product Stackelberg duopoly isP= 14,000 -5Q.The cost structures for the leader and the follower, respectively, areCL(QL) = 3,000QLandCF(QF) = 5,000QF..
a. What is the follower's reaction function?
b. Determine the equilibrium output level for both the leader and the follower.
c. Determine the equilibrium market price.
d. Determine the profits of the leader and the follower.
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Essentials Of Time Series For Financial Applications
Authors: Massimo Guidolin, Manuela Pedio
1st Edition
0128134100, 9780128134108
