Zipcar (now owned by Avis) initiated the business of renting cars by the hour and is still the industry leader. However, car2go (owned by Daimler), Enterprise CarShare, and Hertz 24/7 have more recently entered the market. As of 2015, the four companies control about 95% of the U.S. car sharing market. Zipcar's large network of members and cars may allow it to be a Stackelberg leader. Use graphs to show how the entry of rivals affects Zipcar. Discuss the difference between a market with a Stackelberg leader and one follower versus a market with three followers. DA MR: Assume the figure at right shows the demand for rental cars and the residual demand for rental cars for Zipcar with one follower. Zipcar is the leader. p. $ per unit -MC Consider the effects of a new firm entering the market and becoming a second follower. 1.) Using the line drawing tool, graph Zipcar's residual demand with two followers. Label this line 'D 2.) Using the line drawing tool, graph Zipcar's residual marginal revenue curve with two followers. Label this line 'MR. D 4, Quantity 3.) Using the point drawing tool, identify Zipcar's profit-maximizing price and quantity, assuming it is the industry leader with two followers. Label this point 'ez' Zipcar (now owned by Avis) initiated the business of renting cars by the hour and is still the industry leader. However, car2go (owned by Daimler), Enterprise CarShare, and Hertz 24/7 have more recently entered the market. As of 2015, the four companies control about 95% of the U.S. car sharing market. Zipcar's large network of members and cars may allow it to be a Stackelberg leader. Use graphs to show how the entry of rivals affects Zipcar. Discuss the difference between a market with a Stackelberg leader and one follower versus a market with three followers. DA MR: Assume the figure at right shows the demand for rental cars and the residual demand for rental cars for Zipcar with one follower. Zipcar is the leader. p. $ per unit -MC Consider the effects of a new firm entering the market and becoming a second follower. 1.) Using the line drawing tool, graph Zipcar's residual demand with two followers. Label this line 'D 2.) Using the line drawing tool, graph Zipcar's residual marginal revenue curve with two followers. Label this line 'MR. D 4, Quantity 3.) Using the point drawing tool, identify Zipcar's profit-maximizing price and quantity, assuming it is the industry leader with two followers. Label this point 'ez