Consider a market demand function P=100-0.01Q. There are only two firms in the market and each firm's total cost function is 40g to produce identical products. Suppose Firm 1 is the first mover (leader) and Firm 2 is the follower. How much "more profits" can be achieved by the first mover compared to the Cournot model case (i.e., no first-mover effects)? O 1000 O 2000 O 3000 O 4000 O 5000

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Consider a market demand function P=100-0.01Q. There are only two firms in the market and each firm's total cost function
is 40g to produce identical products. Suppose Firm 1 is the first mover (leader) and Firm 2 is the follower. How much "more
profits" can be achieved by the first mover compared to the Cournot model case (i.e., no first-mover effects)?
O 1000
2000
O 3000
O 4000
O 5000
Transcribed Image Text:Consider a market demand function P=100-0.01Q. There are only two firms in the market and each firm's total cost function is 40g to produce identical products. Suppose Firm 1 is the first mover (leader) and Firm 2 is the follower. How much "more profits" can be achieved by the first mover compared to the Cournot model case (i.e., no first-mover effects)? O 1000 2000 O 3000 O 4000 O 5000
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