(Answered) The market for nutmeg is controlled by two small island

Economics

The market for nutmeg is controlled by two small island nations, Penang and Grenada. The market demand for bottled nutmeg is given by P = 100 ? qP ? qG, where qP is the quantity Penang produces and qG is the quantity Grenada produces. Both Grenada and Penang produce nutmeg at a constant marginal and average cost of $20 per bottle. Suppose that Grenada transforms the nature of competition to Stackelberg competition by announcing its production targets publicly in an attempt to seize a first-mover advantage. How much output should Grenada announce it will produce as the Stackelberg leader?

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