What strategic advantage compared to a Cournot Oligopoly results in the Stackelberg outcome?

Question

Quizplus · Accepted Answer

The strategic advantage that results in the Stackelberg outcome compared to a Cournot Oligopoly is the ability to move first. The Stackelberg leader determines their level of output or price before the other firms in the market, which allows the leader to anticipate and react to the response of the other firms. This enables the leader to set a higher level of output or price compared to the Cournot outcome, resulting in higher profits for the leader. Therefore, choice A is the correct answer. Choices B, C, and D are incorrect as they are not strategic advantages of the Stackelberg outcome compared to a Cournot Oligopoly.

What Strategic Advantage Compared to a Cournot Oligopoly Results in the Stackelberg