Alex and Anna are the only sellers of kangaroos in Sydney, Australia. Anna chooses her profitmaximizing number of kangaroos to sell, q1, based on the number of kangaroos that she expects Alex to sell. Alex knows how Anna will react and chooses the number of kangaroos that she herself will sell, q2, after taking this information into account. The inverse demand function for kangaroos is P(q1 + q2) = 2000 − 2(q1 + q2). It costs $400 to raise a kangaroo to sell.

Alex and Anna are Stackelberg competitors. Who is the leader and who is the follower?