Find the stackelberg equilibrium outputs-price and profits

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Reference no: EM131244809

Consider a homogeneoous-good Cournot oligopoly with 2 identical firms with C(q) = 0 and P(Q) = e^-Q; for Q >0:

a) Find the Stackelberg equilibrium outputs, price and profits (with firm 1 as the leader).

b) Compare the Stackelberg and the Cournot equilibria in terms of equilibrium outputs, price and profits. Are the comparisons intuitively expected?

Reference no: EM131244809

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