Consider a Stackelberg Duopoly with the Following Inverse Demand Function

question 20

Multiple Choice

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q₁ - 2Q₂.The firms' marginal cost are identical and given by MC_i(Q_i) = 2Q_i.Based on this information the Stackelberg leader's reaction function is

• A)Q_L = 24.5 - 0.5Q_F.
• B)Q_L = 50 - 0.5Q_F.
• C)Q_L = 49 - 0.5Q_F.
• D)none of the statements associated with this question are correct.

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