Question
Two firms competing in a duopoly produce differentiated products and face inverse demand functions estimated to be: Firm 1: P (9.92) = 7390-9 -0.592
Two firms competing in a duopoly produce differentiated products and face inverse demand functions estimated to be: Firm 1: P (9.92) = 7390-9 -0.592 Firm 2: P2 (91-92) = 4960-92-0.591 Firm 1 has a cost function of C (91) =15g, while Firm 2 has a cost function of C (92) = 2002. What quantity will Firm 1 produce in the Nash-Stackelberg equilibrium if Firm 1 is the Stackelberg leader? Hint: Firm 2 selects its quantity according to: b (91) =2,470-91- Firm 1 will produce units. (Round your answer to two decimal places).
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Microeconomics An Intuitive Approach with Calculus
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