Stackelberg duopolists, Firm 1 and Firm 2, face inverse market demand $P = 50 - Q$. Both have marginal cost, $M C = \$ 20$. If the follower takes the leader's output as fixed at $Q _ { 1 }$, what is the equation of its reaction function?
A) $30 - Q _ { 1 } = Q _ { 2 }$
B) $15 - Q _ { 1 } = Q _ { 2 }$
C) $15 - 2 Q _ { 1 } = Q _ { 2 }$
D) $15 - Q _ { 1 } / 2 = Q _ { 2 }$

Question

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The Answer of Stackelberg duopolists, Firm 1 and Firm 2, face inverse market demand $P = 50 - Q$. Both have marginal cost, $M C = \$ 20$. If the follower takes the leader's output as fixed at $Q _ { 1 }$, what is the equation of its reaction function?
A) $30 - Q _ { 1 } = Q _ { 2 }$
B) $15 - Q _ { 1 } = Q _ { 2 }$
C) $15 - 2 Q _ { 1 } = Q _ { 2 }$
D) $15 - Q _ { 1 } / 2 = Q _ { 2 }$

Stackelberg Duopolists, Firm 1 and Firm 2, Face Inverse Market P=50−QP = 50 - QP=50−Q

Stackelberg Duopolists, Firm 1 and Firm 2, Face Inverse Market $P = 50 - Q$