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Suppose Duopolists Face the Market Inverse Demand Curve P =

Question 83

Multiple Choice

Suppose duopolists face the market inverse demand curve P = 100 - Q, Q = q1 + q2, and both firms have a constant marginal cost of 10 and no fixed costs. If firm 1 is a Stackelberg leader and firm 2's best response function is Suppose duopolists face the market inverse demand curve P = 100 - Q, Q = q<sub>1</sub> + q<sub>2</sub>, and both firms have a constant marginal cost of 10 and no fixed costs. If firm 1 is a Stackelberg leader and firm 2's best response function is , at the Nash-Stackelberg equilibrium firm 2's profit is A) 400. B) 650. C) 800. D) 1200. , at the Nash-Stackelberg equilibrium firm 2's profit is


A) 400.
B) 650.
C) 800.
D) 1200.

Correct Answer:

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