Suppose the inverse demand for a particular good is given by P = 1200 – 12Q. Furthermore, th are only two firms, A and B. Firm A's marginal cost is a constant $25, and Firm B's marginal cost is constant $20. Assume these two firms engage in Stackelberg competition, where Firm A moves first. If we assume that the firm with the lowest costs could supply the entire market, then the deadweight loss due to the market power these two firms exert through Stackelberg competition equals $______. [Round your answer to two decimals 1

Suppose the inverse demand for a particular good is given by P = 1200 – 12Q. Furthermore, th are only two firms, A and B. Firm A's marginal cost is a constant $25, and Firm B's marginal cost is constant $20. Assume these two firms engage in Stackelberg competition, where Firm A moves first. If we assume that the firm with the lowest costs could supply the entire market, then the deadweight loss due to the market power these two firms exert through Stackelberg competition equals $______. [Round your answer to two decimals 1

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.4P

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