Consider a Stackelberg Duopoly with the Following Inverse Demand Function

question 41

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(Q_i) = 2.Based on this information,the follower's reaction function is:

• A) r_F(Q_L) = 24.5 − 0.5Q_F.
• B) Q_L = 49 − 0.5Q_F.
• C) r_F(Q_L) = 24.5 − 0.5Q_L.
• D) Q_F = 49 − 0.25Q_L.

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