The inverse demand for a homogeneous-product Stackelberg duopoly is P= 10,000 -4Q. The cost structures for the leader and thefollower, respectively, are CL(QL) = 3,000QL and CF (QF) = 4,000 QFa. What is the follower's reaction function?QF= 7500.1QLb. Determine the equilibrium output level for both the leader and the follower.Leader output:875Follower output:641c. Determine the equilibrium market price.$ 4,999d. Determine the profits of the leader and the follower.Leader profits: $1,619,531Follower profits: $ 999,506 ✪

Answered: Image /qna-images/answer/9edf4487-3bb1-41cf-bca0-617bc638f5b7.jpg

Answered: The inverse demand for a…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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