The market demand function is Q = 10,000 - 1,000p. Each firm has a marginal cost of mequals$0.16. Firm 1, the leader, acts before Firm 2, the follower. Solve for the Stackelberg-Nash equilibrium quantities, prices, and profits. Compare your solution to the Cournot-Nash equilibrium.
The Stackelberg-Nash equilibrium quantities are:
q 1 = units and q 2 =units.
The Stackelberg-Nash equilibrium price is:p = $.Profits for the firms areprofit1 = $and profit2 = $.The Cournot-Nash equilibrium quantities are:q1=units and q2=unitsThe Cournot-Nash equilibrium price is:p = $.Profits for the firms areprofit1 = $and profit2 = $
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