(20) Two firms compete in a market, simultaneously choosing quantities q1 0 and q2 0. Each firm faces marginal costs of 3 per unit produced. The market price is given by p = 15 q1 q2.

(a) Write down a strategy for each firm. (5)

(b) Find all pure strategy Nash equilibria. (5)

(c) Calculate firms' equilibrium profits and the equilibrium price. (5)

(d) Draw the best response curves for each player. Indicate the Nash equilibria on the picture. (5)