Consider a market consisting of two firms where the inverse demand curve is given by P = 500 ? 2(Q1 + Q2). If the Stackelberg leader's and follower's marginal costs are zero, the leader's marginal revenue is:
A. MR(QL, QF) = 125 ? QL + 0.5QF.
B. MR(QF) = 250 ? 2QF.
C. MR(QL) = 250 ? 2QL.
D. MR(QL, QF) = 125 ? 0.5QL + QF.
Answer: C
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