Make sure that you solve for the output level of each firm

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Consider a three-period version of the Stackelberg model analyzed in class. Assume that the market demand curve is given by , and suppose that there are three firms that set their output levels sequentially: firm 1 sets in period 1, firm 2 sets in period 2, and firm 3 sets in period 3. Solve for the sequential moves equilibrium, assuming that the production is costless (that is, the total cost of production is zero for every firm, no matter how much the firm produces). Make sure that you solve for the output level of each firm, and the market price.

Reference no: EM13146381

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