Using the StackelbergSolver, again assume that each firm's marginal cost of producing an automobile for sale in this market is $15,000, that Firm 1 (leader) has fixed costs of $50,000,000 and Firm 2 (follower) has fixed costs of $40,000,000. Remember, in the Stackelberg world, the leader chooses their quantity, acting as if they are a monopolist, leaving some ‘residual demand' for the follower, who then chooses their quantity to furnish to the market. Each of their choices, though, serves as their respective "no regret" choice of output given what they thought the other firm would (or did) choose.
a. What price will consumers pay per new automobile?
b. How many new autos will be sold?