(7) For each situation, solve for the Stackelberg equilibrium 7a) Suppose Sarah’s constant MC is $5 but Joe's is $8. (Using P(Q) = 20–0.1Q again and assuming Joe goes first) 7b) Suppose Joe and Sarah have the same marginal cost ($5) but market inverse demand is now P(Q) = 30 – 0.2 Q

(7) For each situation, solve for the Stackelberg equilibrium 7a) Suppose Sarah’s constant MC is $5 but Joe's is $8. (Using P(Q) = 20–0.1Q again and assuming Joe goes first) 7b) Suppose Joe and Sarah have the same marginal cost ($5) but market inverse demand is now P(Q) = 30 – 0.2 Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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