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Two firms compete a la Stackelberg. Firm A has the following cost function TCA(q) = 2 + 3qA and Firm B has the following cost

Two firms compete a la Stackelberg. Firm A has the following cost function

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TCA(q) = 2 + 3qA and Firm B has the following cost function TCB(q) = 3 + 2613 Suppose that the two firms operate in a market which inverse demand function is given by P = 10 2.5Q a) If firm B is the leader and A the follower, which will be the quantity produced by each firm and the price charged in a Stackelberg equilibrium? QA= QB: l3: b) If firm A is a leader and firm B is a follower, which will be the quantity produced by each firm and the price charged in the new Stackelberg equilibrium? QA= QB: D: c) If both form a cartel, which will be the quantity produced by each firm and the price charged if they maintain the agreement? ClA= QB= D: d) Which of the 3 previous equlibrium, is the best one from consumers' point of view? D

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