The demand the duopoly firms face is p = 100 – 2Q where Q = q1 + q2. Each firm has the following cost function: c(qi) = 40 + qi2/2, i = 1, 2. Find the Stackelberg equilibrium. Find the Cournot equilibrium.Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.

In the Cournot equilibrium, companies in an oligopoly independently determine the amount of goods or…

Answered: Stackelberg equilibrium

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Stackelberg equilibrium

Survey of Economics (MindTap Course List)

9th Edition

ISBN:9781305260948

Author:Irvin B. Tucker

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Chapter9: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 20SQ

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Question

The demand the duopoly firms face is p = 100 – 2Q where Q = q1 + q2. Each firm has the following cost function: c(qi) = 40 + qi2/2, i = 1, 2. Find the Stackelberg equilibrium. Find the Cournot equilibrium.

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Step 1: Define Cournot equilibrium and Stackelberg equilibrium

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Step 2: Explain the Stackelberg Equilibrium and Cournot equilibrium.

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Step 3: Explain the Cournot equilibrium.

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