Turn on thread page Beta
    • Thread Starter

    Hi could you please help me with this problem? been trying for hours, seems so confusing

    Suppose that two firms, a “leader” (L) and a “follower” (F), compete in a Stackelberg fashion: the leader chooses their quantity before the follower. Suppose that the leader has constant marginal costs equal to cL = 5 while the follower has constant marginal costs cF. The inverse demand function is given by p = 10−Q, where Q = qL + qF.
    (a) Solve for the (subgame perfect) Nash equilibrium quantities of the two firms

    (b) With reference to your answer to part (a) of this question, for what levels of cF do we have q∗ F > q∗ L in equilibrium? Discuss
The home of Results and Clearing


people online now


students helped last year

University open days

  1. Bournemouth University
    Clearing Open Day Undergraduate
    Wed, 22 Aug '18
  2. University of Buckingham
    Postgraduate Open Evening Postgraduate
    Thu, 23 Aug '18
  3. University of Glasgow
    All Subjects Undergraduate
    Tue, 28 Aug '18
How are you feeling about GCSE results day?
Useful resources

Make your revision easier


Maths Forum posting guidelines

Not sure where to post? Read the updated guidelines here


How to use LaTex

Writing equations the easy way

Student revising

Study habits of A* students

Top tips from students who have already aced their exams

Study Planner

Create your own Study Planner

Never miss a deadline again

Polling station sign

Thinking about a maths degree?

Chat with other maths applicants

Can you help? Study help unanswered threads

Groups associated with this forum:

View associated groups

The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

Write a reply...
Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.