In the Stackelberg leadership model,
A)the leader earns a larger profit compared to the follower.
B)the leader charges a higher price for its output compared to the follower.
C)the follower produces a larger output compared to the leader.
D)the follower charges a lower price for its output compared to the leader.

Question

Quizplus · Accepted Answer

In the Stackelberg leadership model, the leader firm moves first and commits to an output level, which allows it to earn a larger profit by influencing the follower's output decision.

In the Stackelberg Leadership Model