A7.4 You are the top student in your economics class, and you decide that you will make some extra money by tutoring college freshmen in the Introduction to Economics course. Your only competitor is your classmate Bernardo. You and Bernardo engage in Cournot competition, and you both know that the monthly demand for economics tutoring services is Q = 160 - 2P where Q is the total monthly number of hours of economics tutoring services demanded and P is the hourly price of economics tutoring services. Solving for P from the market demand gives the inverse market demand:

P = 80 - 0.5Q You supply qA hours of economics tutoring services, and Bernardo supplies qB hours of economics tutoring services. Each of you incurs a total cost of supplying qi hours of economics tutoring services equal to TC1qi2 = 240 + 0.25q2i

a. Determine the number of economics tutoring hours that each tutor supplies.

b. When Bernardo and you supply your equilibrium quantities, what is the resulting market price of an hour of economics tutoring services?