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Solving equilibrium output in Stackelberg Duopoly.

The inverse demand for a homogeneous product Stackelberg duopoly is P = 20,000 - 5Q. The cost structures for the leader and the follower, respectively, are CL (QL) = 3,000QL and Cf (Qf) = 4,000Qf)

Determine the equilibrium output level for both the leader and the follower.

Q2* =1600 - 0.5Q1 (this is followers reaction function)

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M917015

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