Answer :
Final answer:
If the monopoly output of the incumbent, limit output of incumbent, and incumbent's Stackelberg equilibrium output are equal, the incumbent does not need to accommodate the follower's actions.
Explanation:
In a Stackelberg game, the leader (incumbent) determines its output level first, and the follower chooses its output level based on the leader's decision. If the monopoly output of the incumbent, limit output of incumbent, and incumbent's Stackelberg equilibrium output are equal, it means that the incumbent's profit-maximizing output level is the same regardless of whether it acts as a monopolist or faces competition from the follower.
This situation suggests that the incumbent does not need to accommodate the follower's actions and can maintain its output level without making any adjustments. Since the incumbent's output choices are already optimal in both scenarios, there is no need for accommodation.
Learn more about stackelberg game and incumbent's output here:
https://brainly.com/question/32109204
#SPJ14
Final answer:
If the monopoly output of the incumbent, limit output of incumbent, and incumbent's Stackelberg equilibrium output are equal, the incumbent does not need to accommodate the follower's actions.
Explanation:
In a Stackelberg game, the leader (incumbent) determines its output level first, and the follower chooses its output level based on the leader's decision. If the monopoly output of the incumbent, limit output of incumbent, and incumbent's Stackelberg equilibrium output are equal, it means that the incumbent's profit-maximizing output level is the same regardless of whether it acts as a monopolist or faces competition from the follower.
This situation suggests that the incumbent does not need to accommodate the follower's actions and can maintain its output level without making any adjustments. Since the incumbent's output choices are already optimal in both scenarios, there is no need for accommodation.
Learn more about stackelberg game and incumbent's output here:
https://brainly.com/question/32109204
#SPJ14