1. Firm A and Firm B sell identical goods As in the example in the mini-lecture, total market demand for the book is: Q(P) = 1,000 - 0.1P The inverse demand function is therefore P(QM) = 10,000 - 100M OM is total market production (i.e., combined production of firm's A and B. That is: QM = QA + QB As a result, the inverse demand curve for each firm is: P(QAQ=) = 10,000 - 10QA - 10QB The difference between this example and the example in class is that the two firms have different costs. Firm A has the same cost as in class, but firm B has a different cost function: TCA (QA) = 5000QA TCB (QB) = 3000QBa. Using the demand function and the cost functions above, what is firm A's profit function. b. Using the profit function above and assuming that firm B produces Q , calculate what firm A's best response is to firm B's decision to produce Q- Note: Firm A's best response should be a function of Q B c. Using the demand function and the cost functions above, what is firm B's profit function d. Using the profit function above and assuming that firm A produces QA, calculate what firm B's best response is to firm A's decision to produce QA- Note: Firm B's best response should be a function of QA