Which would you expect to make the highest profits,other things equal?
A) Bertrand oligopolist
B) Cournot oligopolist
C) Stackelberg leader
D) Stackelberg follower

Question

Quizplus · Accepted Answer

As the Stackelberg leader, the firm has the advantage of being able to set quantity and price before its competitors respond. By setting a strategic quantity or price, the leader is able to gain a larger market share and potentially higher profits than the other firms in the oligopoly. The other options may not necessarily lead to the highest profits, as in a Bertrand oligopoly, firms may engage in price competition leading to lower profits, and in a Cournot oligopoly, firms may limit production and not maximize profits.

Which Would You Expect to Make the Highest Profits,other Things