The inverse demand for a homogeneous-product Stackelburg duopoly is P=24000-5Q. The cost structures for the leader and the follower respectively are CL(QL)=3000QL and CF(QF)=4000QF. a) What is the followers reaction function? b) Determine the equilibrium output level for both the leader and the follower. Leader output: Follower output: c) Determine the equilibrium markert price $ d) Determine the profits of the leader and the follower. Leader profits: $ Follower profits: $
The inverse demand for a homogeneous-product Stackelburg duopoly is P=24000-5Q. The cost structures for the leader and the follower respectively are CL(QL)=3000QL and CF(QF)=4000QF. a) What is the followers reaction function? b) Determine the equilibrium output level for both the leader and the follower. Leader output: Follower output: c) Determine the equilibrium markert price $ d) Determine the profits of the leader and the follower. Leader profits: $ Follower profits: $
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter13: best-practice Tactics: Game Theory
Section: Chapter Questions
Problem 1E
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The inverse demand for a homogeneous-product Stackelburg duopoly is P=24000-5Q. The cost structures for the leader and the follower respectively are CL(QL)=3000QL and CF(QF)=4000QF.
a) What is the followers reaction function?
b) Determine the equilibrium output level for both the leader and the follower.
Leader output:
Follower output:
c) Determine the
$
d) Determine the profits of the leader and the follower.
Leader profits: $
Follower profits: $
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