E. None of the above
Explanation:
The standard reaction function of firm 2 is given as = a-Cb/2b - 1/2*Qa
P = 30 - (Qa + Qb)
where a = 30 b = 1 and C = 3.
Leader's output = (a + Cb - 2Ca)/2b
Leader's output = (30 + 3 - 3*2)/2
= 13.5 units.
Reaction function of firm B,
Qb = 30 - 3/2
= 13.5 - 1/2*13.5
= 6.75 units.
P = 30 - (13.5 - 6.75)
= $9.75
Therefore, The price of this new drink in the long run if the industry is a Stackelberg duopoly is $9.75
15.45%
Explanation:
Expected return of portfolio = (R1*W1) + (R2*W2 ) + (R3*W3) (Where R means Expected Return of stock and W means Weight of stock)
Expected return of portfolio = (15%*0.25)+(18%*0.45)+(12%*0.30)
Expected return of portfolio = 3.75% + 8.1% + 3.6%
Expected return of portfolio = 15.45%
So, the expected return of the portfolio above is 15.45%