Two firms compete as a Stackelberg duopoly. The demand they face is P = 24 ? Q. The cost function for each firm is C(Q) = 4Q. The profits of the two firms are:
A. ?L = $100; ?F = $50.
B. ?L = $20; ?F = $10.
C. ?L = $50; ?F = $25.
D. ?L = $25; ?F = $12.5.
Answer: C
Economics
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