Analysis of Stackelberg Leadership Model Output Behavior under the Mechanism of Expanding Market Price

This study explores the competitive mechanism of firms in a duopolistic market and constructs a model of duopolistic firms' optimal output and maximum profit according to the Stackelberg Leadership Model. By taking Taiwan's dairy market as an example, the paper analyzes how the leading firm, in the state of full information disclosure, makes decision analysis to determines its output strategy according to the reaction function of the follower firm. At the same time, the output strategy of the follower firm is determined according to the output strategies of the leading firm. The action of the firms has sequence, and through the dynamic cycle process to achieve the market equilibrium and to maximize the oligopolistic firm profit.