Suppose Duopolists Face the Market Inverse Demand Curve P =

question 24

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.If firm 1 is a Stackelberg leader and firm 2's best response function is q₂ = (100 - q₁) /2,at the Nash-Stackelberg equilibrium the prices the two firms charge are

• A) P₁ = 40, P₂ = 40.
• B) P₁ = 30, P₂ = 30.
• C) P₁ = 30, P₂ = 40.
• D) P₁ = 40, P₂ = 30.

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Definitions:

Competitive Strategy

Strategic approaches that a company takes to gain an advantage in the marketplace, typically through differentiation, cost leadership, or focus strategies.

Benchmarking Process

A method of comparing business processes and performance metrics to industry bests or best practices from other companies.

Performance Goals

Specific targets or objectives set by individuals or teams that aim to measure and achieve desired levels of performance.

Benchmark Partners

Entities or companies with which an organization compares its processes and performance to identify best practices and opportunities for improvement.