Find the stackelberg equilibrium quantities-profits

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Consider a Cournot duopoly with the inverse demand P = 260 - 2Q. Firms 1 and 2 compete by simultaneously choosing their quantities. Both firms have constant marginal and average cost M C = AC = 20. a. Find each firm’s best response function. b. Find the Cournot - Nash equilibrium quantities, profits and market price. c. Plot the best response curves and illustrate the equilibrium point. d. Suppose, instead, that firm 1 chooses first and 2 follows. Find the Stackelberg equilibrium quantities, profits and market price.

Reference no: EM131169503

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