Suppose the Demand for Pizza in a Small Isolated Town

question 90

Essay

Suppose the demand for pizza in a small isolated town is p = 10 - Q.The only two firms,A and B,behave as Cournot duopolists.Each has a cost function TC = 2 + Q.If the government wants to subsidize firm A to raise its output to that of a Stackelberg leader,how large should the subsidy be?

---

Definitions:

Urine Output

The amount of urine expelled from the body, used as an important indicator of kidney and overall health.

Blood Pressure

The force of circulating blood on the walls of the arteries, a critical indicator of cardiovascular health.

Diencephalon

A structure that includes the thalamus and the hypothalamus. It is located between the cerebral hemispheres and is superior to the brain stem.

Antidiuretic Hormone

A hormone released by the pituitary gland that helps regulate the body's retention of water by increasing the reabsorption of water in the kidneys.