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19-12-2022
Business

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Stackelberg duopolists, Firm 1 and Firm 2, face inverse market demand P=50-Q. Both have marginal cost, MC=$20. If the follower takes the leader’s output as fixed at Q1, what is the equation of its reaction function?
a) 30-Q1=Q2
b) 15-Q1=Q2
c) 15-2Q1=Q2
d) 15-Q1/2=Q2

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