Assignment Stackelberg Duopoly

Published by Mario Oettler on


Suppose we have a market with two vendors A and B. They aim to maximize their profits. They can adjust their production quantities. Vendor A is the first on the market. B follows after A has set his quantity. The following formula calculates the market price:

p = 800-qA-qB

What is the quantity, price and profit for A and B if both optimize individually?


qA = 400

GA = 80,000

qB = 200

GB = 40,000

p = 200