Suppose duopolists face the market inverse demand curve P = 100 – Q, Q = q1 + q2, and both firms have a constant marginal cost of 10. If firm

Suppose duopolists face the market inverse demand curve P = 100 – Q, Q = q1 + q2, and both firms have a constant marginal cost of 10. If firm 1 is a Stackelberg leader and firm 2’s best response function is q2 = (100 – q1)/2, at the Nash-Stackelberg equilibrium firm 2’s output is
A)30.
B)40.
C)60.
D)70.

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