An industry has two firms—a Stackelberg leader and a follower. The price of the industry output is given by P = 84 −Q, where Q is the total output of the two firms. The follower has a marginal cost of $0. The leader has a marginal cost of $21. How much should the leader produce in order to maximize profits?

Exercise 2-12 cost behavior; high-low method [lo2-3, lo2-4] speedy parcel service operates a fleet of delivery trucks in a large metropolitan area. a careful study by the company’s cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 11.6 cents per mile. if a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. required: 1.& 2. using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (round the "variable cost per mile" to 3 decimal places.)