Two firms compete as a Stackelberg duopoly. The demand they face is P = 40 ? Q. The cost function for each firm is C(Q) = 4Q. The profits of the two firms are:

Assume that tortilla chips and salsa are complements. When the price of tortilla chips decreases

A) the demand for salsa decreases. B) the supply of salsa decreases. C) the demand for salsa increases. D) the demand for tortilla chips decreases.

In monopolistic competition, each firm supplies a ________ part of the total market output and its actions ________ the actions of the other firms

A) small; do not directly affect B) small; directly affect C) large; do not directly affect D) large; directly affect