2 = = Let there be two firms, A and B, producing identical products, whose respective cost functions are CA (YA) = y and CB (YB) = 2y, where ya and YB denote the outputs of the two firms. Assume that the inverse demand function facing these firms is: p(y) = 1000 0.5y, where y YA + YB. 1. Suppose that the firms' interaction is modeled as sequential-move game with quantity leadership in which firm A is the leader. Solve the Stackelberg equilibrium of this market. 2. Suppose that the firms interaction is modeled as sequential-move game with price leadership in which firm A is the leader. Solve the equilibrium of this market. 3. Suppose that firms' the interaction is modeled as simultaneous-move game with quantity setting. Solve the Cournot equilibrium of this market. 4. Suppose that the firms interaction is modeled as simultaneous-move game with price setting. Solve the Bertrand equilibrium of this market. 5. Suppose that the firms form a cartel. What will be the price set by the cartel and what are the outputs of the two firms. a 2 = = Let there be two firms, A and B, producing identical products, whose respective cost functions are CA (YA) = y and CB (YB) = 2y, where ya and YB denote the outputs of the two firms. Assume that the inverse demand function facing these firms is: p(y) = 1000 0.5y, where y YA + YB. 1. Suppose that the firms' interaction is modeled as sequential-move game with quantity leadership in which firm A is the leader. Solve the Stackelberg equilibrium of this market. 2. Suppose that the firms interaction is modeled as sequential-move game with price leadership in which firm A is the leader. Solve the equilibrium of this market. 3. Suppose that firms' the interaction is modeled as simultaneous-move game with quantity setting. Solve the Cournot equilibrium of this market. 4. Suppose that the firms interaction is modeled as simultaneous-move game with price setting. Solve the Bertrand equilibrium of this market. 5. Suppose that the firms form a cartel. What will be the price set by the cartel and what are the outputs of the two firms. a