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Two Firms Compete as a Stackelberg Duopoly

Question 107

Multiple Choice

Two firms compete as a Stackelberg duopoly.The demand they face is P = 40 − Q.The cost function for each firm is C(Q) = 4Q.The profits of the two firms are:


A) L = $162; F = $81.
B) L = $81; F = $40.5.
C) L = $81; F = −$40.5.
D) L = $162; F = $40.5.

Correct Answer:

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