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Given the Demand function, Compute the Stack berg Equilibrium.

Suppose two identical companies capable to produce widgets and they are the only companies in the market. Their costs are given by C1 = 5 (Q1 ) and C2 = 5 (Q2 ) respectively, where Q1 is the output of company one and Q2 is the output of company 2. Price is determined by the subsequent demand curve: (25 points) (MC for each company is 5)

P= 100-Q, where Q = Q1 + Q2 .

Find the Stackelberg Equilibrium.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M917111

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