In Problem 4, Suppose That the Market Demand Curve for Bean

In Problem 4, suppose that the market demand curve for bean sprouts is given by P = 1,280 - 4Q, where P is the price and Q is total industry output. Suppose that the industry has two firms, a Stackleberg leader and a follower. Each firm has a constant marginal cost of $80 per unit of output. In equilibrium, total output by the two firms will be

A) 150.
B) 75.
C) 225.
D) 300.
E) 37.50.

Correct Answer:

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