Consider a Stackelberg Duopoly with the Following Inverse Demand Function

question 97

Multiple Choice

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q₁ - 2Q₂. The firms' marginal costs are identical and are given by MC_i(Q_i) = c_iQ_i. Based on this information, the Stackelberg leader's marginal revenue function is:

• A) MR(Q_L) = 50 - 2Q_L - 0.5c_L.
• B) MR(Q_L) = 50 - 2Q_L - 0.5c_F.
• C) MR(Q_F) = 100 - 2Q_F - 0.5c_F.
• D) MR(Q_F) = 100 - Q_F - 0.5c_F.

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