The Outcome of the Stackelberg Model Is

question 26

Multiple Choice

The outcome of the Stackelberg model is

• A) a Nash equilibrium.
• B) the same as the Cournot outcome.
• C) that the follower earns zero profit.
• D) that the follower cannot be on its best-response curve.

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Definitions:

Equity Mode

An investment strategy or approach that involves taking ownership stakes, typically in the form of stocks, in companies rather than lending money to them.

Joint Ventures

Business arrangements where two or more parties collaborate on a project, sharing risks and rewards.

Trading Blocs

Regional groups of countries that have agreed to reduce trade barriers among themselves, such as tariffs and import quotas, to encourage trade and economic cooperation.

Liability of Foreignness

The inherent disadvantages that foreign firms experience in host countries due to their non-native status.