Use the following figure to answer the question : Figure 13-1 : shows the Stackelberg model of a duopoly.Both firms face constant marginal costs equal to OJ and the market demand curve is AD.The Stackelberg firm produces an output of OF and OF is equal to FL.
-Refer to Figure 13-1.The output of the follower firm is represented by the distance _____.
A)OF
B)OK
C)KL
D)FK

Question

Use the following figure to answer the question : Figure 13-1 :  shows the Stackelberg model of a duopoly.Both firms face constant marginal costs equal to OJ and the market demand curve is AD.The Stackelberg firm produces an output of OF and OF is equal to FL. 
-Refer to Figure 13-1.The output of the follower firm is represented by the distance _____.
A)OF 
B)OK 
C)KL 
D)FK

Quizplus · Accepted Answer

The output of the follower firm is represented by the distance FK. This can be determined by drawing a vertical line from point F to intersect the horizontal axis at point K. The output of the follower firm is equal to the distance between points K and L, which is represented by the distance FK. Therefore, the correct choice is D.

Use the Following Figure to Answer the Question : Figure