Consider the following Stackelberg environment. There are three firms in the market. All firms produce a homogenous good. Firm 1 chooses how much to supply first. Firm 2 chooses how much to supply after observing the quantity supplied by firm 1. Finally, firm 3 observes the quantity supplied by firm 1 and firm 2 and chooses how much to supply. The market demand is Q=120-P. For firm the total cost function is TC(q) = 20q, What is themarket clearing price? 32.5 20 25 18.75 4

Consider the following Stackelberg environment. There are three firms in the market. All firms produce a homogenous good. Firm 1 chooses how much to supply first. Firm 2 chooses how much to supply after observing the quantity supplied by firm 1. Finally, firm 3 observes the quantity supplied by firm 1 and firm 2 and chooses how much to supply. The market demand is Q=120-P. For firm the total cost function is TC(q) = 20q, What is themarket clearing price? 32.5 20 25 18.75 4

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter13: Factor Markets: With Emphasis On The Labor Market

Section: Chapter Questions

Problem 4QP: Compare the firms least-cost rule with how buyers allocate their consumption dollars.

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