The inverse demand for a homogeneous-product Stackelburg duopoly is P=24000-5Q. The cost structures for the leader and the follower respectively are CL(QL)=3000QL and CF(QF)=4000QF. a) What is the followers reaction function? b) Determine the equilibrium output level for both the leader and the follower. Leader output: Follower output: c) Determine the equilibrium markert price $ d) Determine the profits of the leader and the follower. Leader profits: $ Follower profits: $

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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The inverse demand for a homogeneous-product Stackelburg duopoly is P=24000-5Q. The cost structures for the leader and the follower respectively are CL(QL)=3000QL and CF(QF)=4000QF.

 

a) What is the followers reaction function?

 

b) Determine the equilibrium output level for both the leader and the follower.

 

Leader output:

 

Follower output:

 

c) Determine the equilibrium markert price

 

$

 

d) Determine the profits of the leader and the follower.

 

Leader profits: $

 

Follower profits: $

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