Suppose Duopolists Face the Market Inverse Demand Curve P =

question 110

Multiple Choice

Suppose duopolists face the market inverse demand curve P = 100 - Q, Q = q₁ + q₂, and both firms have a constant marginal cost of 10 and no fixed costs. If firm 1 is a Stackelberg leader and firm 2's best response function is , at the Nash-Stackelberg equilibrium firm 2's profit is

• A)400.
• B)650.
• C)800.
• D)1200.

---

Definitions:

Elbow

The elbow is a joint connecting the forearm to the upper arm, allowing for the bending and straightening of the arm.

Styloid Process

The styloid process is a slender, pointed projection of bone that extends from the temporal bone of the skull, where it serves as a point of attachment for muscles associated with the tongue and throat.

Radius

One of the two main bones of the forearm, situated on the lateral side (thumb side) of the arm and plays a crucial role in wrist movement.

Ulna

A long bone in the forearm that runs from the elbow to the smallest finger, forming the elbow joint with the humerus.