In Stackelberg competition, the market inverse demand curve is P = a - bq₁ - bq₂, where q₁ + q₂ is the market output, Q, produced by Firm 1 and Firm 2. Marginal cost is given by MC = c. If Firm 1 chooses its output level before Firm 2, how much output will Firm 1 produce? (Hint: Your answer should have q₁ as a function of the parameters a, b, and c.)

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The Answer of In Stackelberg competition, the market inverse demand curve is P = a - bq₁ - bq₂, where q₁ + q₂ is the market output, Q, produced by Firm 1 and Firm 2. Marginal cost is given by MC = c. If Firm 1 chooses its output level before Firm 2, how much output will Firm 1 produce? (Hint: Your answer should have q₁ as a function of the parameters a, b, and c.)

In Stackelberg Competition, the Market Inverse Demand Curve Is P