In Problem 4, Suppose That the Market Demand Curve for Bean

question 8

Multiple Choice

In Problem 4, suppose that the market demand curve for bean sprouts is given by P = 1,480 - 2Q, where P is the price and Q is total industry output. Suppose that the industry has two firms, a Stackleberg leader and a follower. Each firm has a constant marginal cost of $80 per unit of output. In equilibrium, total output by the two firms will be

• A) 175.
• B) 700.
• C) 350.
• D) 525.
• E) 87.50.

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