Two firms compete in a market. Both firms compete in quantities in a Stackelberg duopoly. Firm 1 is the leader and produces firsts the quantityq1. Firm 2 is the follower and produces second the quantity2. The product is sold in the market. The market price at which the units will be sold are given by the inverse demand function(1,2)=10012. All firms have zero fixed costs. Marginal cost for Firm 1 is 10 and marginal cost for Firm 2 is 0.

Question 1:

Compute the Stackelberg duopoly, Their productions in equilibrium are:

All the other solutions are wrong.

q1=42.5;2=26.3

q1=42.5;2=21.25

q1 = 45; q2 = 22.5

question 2

Compute the stackelberg duopoly, their profits in equilibrium are:

all the other solutions are wrong

pgreco1 = 903, pgreco2 = 650

pgreco1= 900, pgreco2= 689

pgreco1=900, pgreco2= 650

question 3

Compute the Stackelberg duopoly, consumer surplus and total surplus are:

CS= 2360 TS= 4050

CS= 2360 TS= 4000

CS= 2363.3 TS= 3955.5

all the answers are wrong