Consider a Stackelberg Duopoly with the Following Inverse Demand Function

question 55

Multiple Choice

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 − 2Q₁ − 2Q₂.The firms' marginal costs are identical and are given by MC_i = 2.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 preceding answers is correct.