An industry has two firms producing at a constant unit cost of $10 per unit. the inverse demand curve for the industry is p = 110 – 0.5q. suppose that firm 1 is a stackelberg leader in choosing its quantity (i. e., firm 1 chooses its quantity first, knowing that firm 2 will observe firm 1’s quantity when it chooses its own output.) how much output will firm 2, the follower, produce?

a. 40 units
b. 15 units
c. 20 units
d 50 units
e. 30 units

The former chairman of the federal reserve, alan greenspan, used the term "irrational exuberance" in 1996 to describe the high levels of optimism among stock market investors at the time. stock market indexes such as the s& p composite price index were at an all-time high. some commentators believed that the fed should intervene to slow the expansion of the economy. why would central banks want to clamp down when the economy is growing? a. to block the formation of unsustainable speculative asset bubbles. b. to curtail excessive profits in the banking system. c. to prevent inflationary forces from gathering momentum. d. all of the above. e. a and c only.