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Suppose the inverse demand function for two firms in a homogeneous product, Stackelberg oligopoly is given by P = 50 - (Q1 + Q2)
Cost functions for the 2 firms are:
C1(Q1)= 2Q1
C2(Q2)= 2Q2
Firm 1 is the leader, and firm 2 is the follower. What is firm 2’s reaction function?