Assume that the market demand and the costs of the duopolists are: P=120-0.4(QA + QB) TCA=5QA TCB= 0.2Q2B Also assume that firm B is the sophisticated leader, Determine:   a.     The reaction curve of A ,the reaction curve of B and the profit function of A b.     Stackelberg equilibrium output level for firm A and Stackelberg equilibrium output level for firm B c.     The market price

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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  Assume that the market demand and the costs of the duopolists are:

P=120-0.4(QA + QB)

TCA=5QA

TCB= 0.2Q2B

Also assume that firm B is the sophisticated leader, Determine:

 

a.     The reaction curve of A ,the reaction curve of B and the profit function of A

b.     Stackelberg equilibrium output level for firm A and Stackelberg equilibrium output level for firm B

c.     The market price

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