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Consider a market with demand represented by P=500-2Q. Assume there are two firms, each with MC=25....

Consider a market with demand represented by P=500-2Q. Assume there are two firms, each with MC=25.

  1. If the firms compete on quantity in Cournot Competition, what will be the equilibrium quantity (for each firm and overall) and price?
  2. If firm 1 is a leader in Stackelberg competition, what will be the equilibrium quantity (for each firm and overall) and price?

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Expert Solution

Rahul Sunny answered 7 months ago
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