2. Soda Oligopoly Suppose that Pepsi and Coke compete as Cournot oligopolists in the production of soda. Demand for soda is given by P = 140 - 2Q where Q = qc + qp is the total number of cans of soda supplied by Pepsi and Coke together, measured in cans per year, and price is measured in dollars per can. The two firms face identical cost functions given by C(q) = 200 + 8q. a. What are the Cournot equilibrium prices, quantities and profits of the two firms? b. Suppose Pepsi and Coke collude to maximize joint profits. If the two firms collude, what will be the total quantity of soda supplied to the market, the equilibrium price and the profits earned by each firm? c. In a one-period game will Pepsi and Coke choose collusion or a Cournot solution? Why? Compute the payoff/profit matrix and characterize the Nash equilibrium. d. If Coke can set its output level before pepsi, how much will Coke produce? How much will Pepsi produce? What is the market price? What are the profits to each firm