Which is the correct answer? A duopoly faces the demand curve D(p) = 30 - .5p....

Which is the correct answer?

A duopoly faces the demand curve D(p) = 30 - .5p. Both firms in the industry have a total cost function given by C(q) = 4q. Suppose that firm 1 is a Stackelberg leader in choosing its quantity first. Firm 1’s profit function can be written as

A	q₁ = 14 - .5q₂.
B	q₂ = 14 - .5q₁.
C	60q -q².
D	56q₁ - q²₁.
E	28q₁ - q²₁.

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Expert Solution

Rahul Sunny answered 8 months ago

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