1, Suppose two firms compete in a homogeneous product market and produce at constant marginal cost of $5. Whichever firm has the lower price will have all of the customers. a. What prices would be charged in this Bertrand oligopoly? b. What would be the rms economic profits? 2.a. In a Sweezy oligopoly ikinked demand model]. If your competitor should raise their price what would be your firm's price strategy? b.Assuming part { a lis occurring what elasticity characteristic would the product show in this type of market? c. What happens to the output of a firm if its marginal cost rises in a Sweezy oligopoly? d. If your competitor lowers their price what would be your price strategy in this Sweezy model? e. Why could the actions of part i d ) lead to a disaster to both competing firms? 3. Answer the following questions based on the one-shot simultaneous move game to the right. The first number in each cell is the payoff to Player A and the second number is the payoff to Player 3. a. What is the secure strategy for Player A? Player B Strategy Left Right Player A Up 1. 5 2, 4 b. Does player B have a dominant strategy? Down 3, 6 4, 7 If so what is it? c. There is one Nash equilibrium. What is it