1. Suppose the Japanese government provides an export subsidy of s = 150 for each

TV Sony exports to the US. Write down the new expression for Sony's profifits.

2.Show how this subsidy affffects equilibrium output of each fifirm, price in the US,

and profifits of each fifirm.

3. A European firm (Phillips) and a Japanese firm (Sony) are the only firms to sell HD TVs in the US. Each firm realizes that US market price depends on total sales. Demand in the US is given by OUS = 4000 - PUS (1) and the costs for each firm are TOPhillips = 200Phillips (2)and TOSony = 200qSony (3) where Phillips and qfor are the output of Phillips and Sony, respectively, and TCPhillips and TCSony are their costs. Answer the following questions