1)Two firms, 1 and 2mshare a market. The market demand is given by:

Firm 1 has constant average and marginal costs of $per unit

Firm 2 has constant average and marginal costs of $per unit

(Marginal Costs are listed by name after the question)

Suppose these firms act as Cournot competitors

a.What is Firm 1's reaction function i.e. what quantity will firm 1 produce given that firm 2 produces units of output?

b.What is Firm 2's reaction function i.e. what quantity will firm 2 produce given that firm 1 produces units of output?

c.How many units of output does firm 1 produce?

d.How many units of output does firm 2 produce?

e.What is the market price?

f.How much profit does firm 1 make?

g.How much profit does firm 2 make?

Suppose that Firm 1 chooses its quantity first, what is the Stackelberg outcome

h.How many units of output does firm 1 produce?

i.How many units of output does firm 2 produce?

j.What is the market price?

k.How much profit does firm 1 make?

l.How much profit does firm 2 make?