Have a Question ?

Home / Answered Questions / Other / the-market-demand-curve-for-a-pair-of-duopolists-is-given-as-p-50-2q-where-q-q1-q2-the-constant-per--aw858

(Solved): The Market Demand Curve For A Pair Of Duopolists Is Given As P=50- 2Q Where Q= Q1 + Q2. The Constan...


The market demand curve for a pair of duopolists is given as P=50- 2Q where Q= Q1+ Q2. The constant per unit marginal cost is 7 for firm 1 and 5 for firm 2. Both firms also have no fixed costs. Find the equilibrium price, quantity and profit for each firm if firm 1 is the Stackelberg leader and firm 2 a follower. Now re-do the computations assuming that firm 2 is the leader and firm 1 the follower.

(a) Firm 1 is leader

Equilibrium Price:

Equilibrium Quantity for Firm 1:

Equilibrium Quantity for Firm 2:

Profit for firm 1:

Profit for firm 2:

(b) Firm 2 is leader       

Equilibrium Price:

Equilibrium Quantity for Firm 1:

Equilibrium Quantity for Firm 2:

Profit for firm 1:

Profit for firm 2:



We have an Answer from Expert View Expert Answer

Expert Answer


We have an Answer from Expert
Buy This Answer $5

-- OR --

Subscribe To View Unlimited Answers
Subscribe $12 / Month