1.Firm 1 and firm 2 are competing in the market for LCD monitors. In stage 1, firm 1 can invest in capital equipment k. Note that k does not represent capacity: the fixed cost of k amount of capital equipment is the change in firm 1's marginal cost is a reduction of (k/4). In stage 2, the firms compete in quantities. Inverse demand is given by = 50 2. Firm 1's total cost is c1(q1)=q1(2-k/4)+ k^2/18 where ₁ is firm 1's output. Firm 2's cost is simpler: ₂(₂) = 2₂. Find the subgame perfect equilibrium quantities. (10 marks)