When Firm 1 Acts as a Stackelberg Leader

question 43

Multiple Choice

When firm 1 acts as a Stackelberg leader:

• A) Firm 2 produces the monopoly output.
• B) Firm 1's profit is less than its profit if they compete in a Cournot fashion.
• C) Firm 2 will earn more than if they compete in a Cournot fashion.
• D) None of the preceding answers is correct.

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