Question: The inverse demand for a homogeneous-product Stackelberg duopoly is \(P=\) \(20,000-5 Q\). The cost structures for the leader and the follower, respectively, are \(C_{L}\left(Q_{L}\right)=3,000 Q_{L}\) and \(C_{F}\left(Q_{F}\right)=4,000 Q_{F}\).

1. What is the follower's reaction function?
2. Determine the equilibrium output level for both the leader and the follower.
3. Determine the equilibrium market price.
4. Determine the profits of the leader and the follower.

Price: $2.99

Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document