Compare the profit per firm under cournot and stackelberg

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Market demand for a commodity is given by P(Q) = 200 - 4Q. The firms have the identical cost structures, where c(q) = 8q

a) Compute price, total quantity, and quantity per firm for two Cournot firms.

b) Suppose one firm is able to act as a Stackelberg leader and the other behaves as a follower. Compute price, total quantity, and quantity per firm under Stackelberg.

c) Compare the profit per firm under Cournot and Stackelberg. Which market would you rather operate in?

Reference no: EM131752567

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