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3. (12 points) Two firms play the following game. Firm 1 chooses a quantity q1, and this is observed by Firm 2, who in turn

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3. (12 points) Two firms play the following game. Firm 1 chooses a quantity q1, and this is observed by Firm 2, who in turn chooses his quantity q2. The inverse demand function is P(q1 + q2) =5 -(91 + 92) and both firms' marginal cost is 1. Firms' profit at the end of the game is their revenue minus their cost. (a) Find the quantities produced in a Subgame Perfect Nash Equilibrium and each firm's profit. (b) What is the maximum the Firm 2 would be willing to pay to change the order of play and become the first one to move

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