Question

The profits of the follower in a Stackelberg duopoly a. are less than those of the leader. b. equal those of the leader. c. are greater than those of the leader. d. all the statements associated with this question are correct.

Answer 1

Answer: a. are less than those of the leader.

Step-by-step explanation:

The Stackelberg leadership model simoky refers to a strategic game whereby the leader firm will make the first moves before the follower firms will later move.

While the firms make their moves during the same time in Cournot duopoly, in Stackelberg duopoly, the leader moves first and hence the profit of the leader are greater than the profit of the follower.

Therefore, the correct option is A