Suppose two duopolists operate at zero marginal cost.The market demand is p = a - bQ.If firm 1 is the Stackelberg leader,what level of output will it choose?
A) q₁ = (a - bq₂) /2b
B) q₁ = (a - 2bq₂) /2b
C) q₁ = a/b
D) q₁ = a/2b
Correct Answer:
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