The Stackelberg Outcome Differs from the Cournot Equilibrium Because

question 2

Multiple Choice

The Stackelberg outcome differs from the Cournot equilibrium because

• A)the games involve different strategic variables.
• B)the first mover can commit to an output off of its best-response function.
• C)quantity supplied is not equal to quantity demanded at the prevailing price.
• D)it is not a perfectly competitive outcome.

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Definitions:

Principal

The original sum of money borrowed in a loan, or the amount of the investment, excluding any interest or profit.

Torts

A body of law focusing on civil wrongs that cause harm or loss, leading to legal liability and a requirement to pay damages.

Agent

A person or entity authorized to act on behalf of another, usually in a business or legal capacity, to create a legal relationship with a third party.

Agency Relationship

A legal arrangement where one party, the agent, is authorized to act on behalf of another party, the principal, in business transactions.