2.Suppose two identical firms (A and B) engage in Cournot competition. Market demand is characterized by inverse demand P(Q)=500-20Q. The marginal cost of both firms is 10.

A)Determine the profit function for firm A

B)The corresponding marginal revenue curves associated with inverse demand are MR_A=500-40q_A-20q_B for firm A and MR_B=500-40q_B-20q_A for firm B. Determine the best-response functions for firms A and B

C)Calculate the Cournot equilibrium price and quantities, and the profits each firm makes

D)If the firms colluded, would the quantity offered to the market be higher or lower? Would deadweight loss be higher or lower? How do you know?