Solving equilibrium output in Stackelberg Duopoly.
The inverse demand for a homogeneous product Stackelberg duopoly is P = 20,000 - 5Q. The cost structures for the leader and the follower, respectively, are CL (QL) = 3,000QL and Cf (Qf) = 4,000Qf)
Determine the equilibrium output level for both the leader and the follower.
Q2* =1600 - 0.5Q1 (this is followers reaction function)