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Coca Cola and Polar Soda Companies Are Engaged in Stackelberg

Question 142

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Coca Cola and Polar soda companies are engaged in Stackelberg competition. They face the market inverse demand curve P = 200 - 4Q, where Q is the total market output consisting of Coca Cola's output, q1, and Polar's output, q2. Each firm produces at a constant marginal cost of $10. In a Stackleberg equilibrium, Coca Cola will produce _____ cans of soda while Polar will produce _____ cans of soda.

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First, determine Polar's reaction functi...

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