Two Firms Compete as a Stackelberg Duopoly

question 14

Multiple Choice

Two firms compete as a Stackelberg duopoly. The demand they face is P = 100 - 3Q. The cost function for each firm is C(Q) = 4Q. The profits of the two firms are:

• A) π_L = $384; π_F = $192.
• B) π_L = $192; π_F = $91.
• C) π_L = $56; π_F = -$28.
• D) π_L = $56; π_F = $28.

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