The equilibrium quantity and price for each producer, Other Subject

QUESTION

a) Briefly distinguish between the Cournot duopoly model and that of Stackelberg

b) Suppose the inverse market demand curve for a telecommunications equipment is P = 100 - 2Q. Suppose there are two firms with constant marginal cost $4. Assuming they behave as Cournot duopolists, what will be the price and total industry output?

c) The inverse market demand curve for a Stackelberg leader and follower is given by P = 60 - 2Q. If each has a marginal cost of $2, what will be the equilibrium quantity and price for each producer?

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