How much output will firm one produce


Problem

In Stackelberg competition, the market inverse demand curve is P = a - bq1 - bq2, where q1 + q2 is the market output, Q, produced by Firm 1 and Firm 2. Marginal cost is given by MC = c. If Firm 1 chooses its output level before Firm 2, how much output will Firm 1 produce?

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Microeconomics: How much output will firm one produce
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