Two firms compete as Stackelberg duopolists in a market with inverse demand given by 132.00 – 20, where pis the per-unit price, q; is the output for Firm i (either Firm 1 or 2), = q1 + 92. Firm 1 is the leader in this market. Both firms face constant marginal costs and Q of $4 per unit. Assume no fixed costs. What is the optimal output for Firm 1? (Round to two decimals if necessary.) What is the optimal output for Firm 2? (Round to two decimals if necessary.)

Two firms compete as Stackelberg duopolists in a market with inverse demand given by 132.00 – 20, where pis the per-unit price, q; is the output for Firm i (either Firm 1 or 2), = q1 + 92. Firm 1 is the leader in this market. Both firms face constant marginal costs and Q of $4 per unit. Assume no fixed costs. What is the optimal output for Firm 1? (Round to two decimals if necessary.) What is the optimal output for Firm 2? (Round to two decimals if necessary.)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter12: Price And Output Determination: Oligopoly

Section: Chapter Questions

Problem 2E

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