A Stackelberg Leader and Follower Choose Their Outputs to Maximize

question 8

Multiple Choice

A Stackelberg leader and follower choose their outputs to maximize their own profits.Local property taxes which constitute a lump sum tax for each of them are reduced by $500 per year for the leader and by $200 a year for the follower.In consequence, the firms

• A)both increase their output, with the leader increasing its output by more.
• B)both increase their output, with the follower increasing its output by more.
• C)increase their output by equal amounts for each firm.
• D)leave their outputs unchanged.
• E)There is not enough information in the question to determine what the firms will do.

---

Definitions:

Persecution

The act of harassing or oppressing someone, especially because of their race, religion, gender, or beliefs.

Memory Accuracy

The extent to which a memory reflects the actual events that occurred.

Psychoanalytic Theory

A theory of personality organization and the dynamics of personality development that guides psychoanalysis, a clinical method for treating psychopathology.

Unconscious Wishes

Desires or thoughts that reside in the unconscious mind, influencing behavior without one's awareness.