Stackelberg Duopolists, Firm 1 and Firm 2, Face Inverse Market $P = 50 - Q$

question 6

Multiple Choice

Stackelberg duopolists, Firm 1 and Firm 2, face inverse market demand $P = 50 - Q$ . Both have marginal cost, $M C = \$ 20$ . If the follower takes the leader's output as fixed at $Q _ { 1 }$ , what is the equation of its reaction function?

• A) \(30 - Q _ { 1 } = Q _ { 2 }\)
• B) \(15 - Q _ { 1 } = Q _ { 2 }\)
• C) \(15 - 2 Q _ { 1 } = Q _ { 2 }\)
• D) \(15 - Q _ { 1 } / 2 = Q _ { 2 }\)

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