Consider a Stackelberg duopoly with the following inverse demand function: P = 100 ? 2Q1 ? 2Q2. The firms' marginal costs are identical and are given by MCi = 2. Based on this information, the Stackelberg leader's reaction function is:

A. QL = 50 ? 0.5QF.
B. QL = 49 ? 0.5QF.
C. QL = 24.5 ? 0.5QF.
D. None of the answers is correct.


Answer: D

Economics

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