Consider a Stackelberg Duopoly with the Following Inverse Demand Function

question 69

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 consumer surplus in this market is:

• A) $36.75.
• B) $73.50.
• C) $1,352.40.
• D) $2,704.80.

---

Definitions:

Economics

The social science that studies how individuals, businesses, governments, and nations make choices on allocating scarce resources to satisfy their unlimited wants.

Scarcity

The fundamental economic problem of having limited resources to meet infinite wants, requiring choices and priorities in resource allocation.

Unlimited Wants

The economic concept that humans have endless desires or wishes for goods and services, exceeding the finite resources available.

Limited Means

A situation or condition of having restricted financial resources or capabilities.