In the Stackelberg Model

question 15

Multiple Choice

In the Stackelberg model

• A)Each firm takes the quantities produced by its rivals as given
• B)Each firm takes the prices charged by its rivals as given
• C)One firm plays a leadership role and its rivals merely react to the leader's quantity
• D)Prices are higher and quantities are slightly less than we would see if the firms colluded to achieve the monopoly outcome

---

Definitions:

Equilibrium Price

The market price at which the quantity of an item demanded by consumers equals the quantity supplied by producers, leading to market stability.

Equilibrium Quantity

The quantity of goods or services supplied is exactly equal to the quantity demanded at the market price.

Diagram

A graphical representation used to illustrate relationships between different elements or steps in a process.

Corn-based Product

Goods derived from corn, including food items, biofuels, and industrial products.