The profits of the follower in a Stackelberg duopoly
A)are greater than those of the leader.
B)equal those of the leader.
C)are less than those of the leader.
D)all the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

In a Stackelberg duopoly, the leader has an advantage in setting the price or quantity first, which allows them to maximize their profits. The follower, who responds to the leader's actions, cannot achieve the same level of profit as the leader. Therefore, the profits of the follower are less than those of the leader.

The Profits of the Follower in a Stackelberg Duopoly