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Consider an industry consisting of two firms producing an identical product. The inverse market demand equation...

Consider an industry consisting of two firms producing an identical product. The inverse market demand equation is P = 100 − 2Q. The total cost equations for firms 1 and 2 are TC1 = 4Q1 and TC2 = 4Q2, respectively.

  1. Firm 1 is the Stackelberg leader and firm 2 is the Stackelberg follower. The output of the Stackelberg follower is:

    1. 6.

    2. 12.

    3. 24.

    4. 48.

    5. None of the above.

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