Two firms compete as a Stackelberg duopoly.The demand they face is P = 100 − 3Q.The cost function for each firm is C(Q)= 4Q.The outputs of the two firms are: A) Q_L = 16; Q_F = 8. B) Q_L = 24; Q_F = 12. C) Q_L = 12; Q_F = 8. D) Q_L = 20; Q_F = 15.

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In a Stackelberg duopoly, the leader firm maximizes its profit given the reaction of the follower. The total quantity Q is the sum of quantities produced by the leader (Q_L) and the follower (Q_F). The demand function is P = 100 - 3Q, and the cost function for each firm is C(Q) = 4Q. To find the equilibrium quantities for the leader and the follower, we solve the problem by first determining the follower's best response function and then optimizing the leader's output given this response. The correct outputs, after solving the optimization problems for both firms, are Q_L = 16 and Q_F = 8, which corresponds to choice A.

Two Firms Compete as a Stackelberg Duopoly