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Why Stackelberg is different from Cournot oligopoly model?

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Yusra Anees
Yusra AneesLv10
28 Sep 2019
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Related questions

(a) What are the differences between Cournot oligopoly outcome and monopoly outcome in terms of the equilibrium price and quantity?

(b) Explain why it is difficult to maintain a cartel agreement (other than it is illegal).

(c) Explain the key differences between Cournot oligopoly, Bertrand oligopoly, and Stackelberg oligopoly.

Provide a real-world example of a market that approximates each oligopoly setting, and explain your reasoning.

a. Cournot oligopoly.
b. Stackelberg oligopoly.
c. Bertrand oligopoly.

Suppose that inverse demand is given by p(Q) = a-bQ, where Q is total quantity supplied in the market. There are two firms in the market, each with a cost function of c(q) = cq, now assume that the first firm moves before the second firm.

A) Compare the price level and level of output under Stackelberg to Cournot

B) What is the fundamental reason that the first firm in the stackelberg model is able to earn higher profits than in the Cournot model

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