3. Suppose there is a market with two competing firms.

The market (inverse) demand is given by: p(y) = 12 - y

Firm costs are -

Firm 1: c1(y1) = 4y1

Firm 2: c2(y2) = 2y2

a) Suppose the two firms are in a Cournot setting where both firms choose quantity simultaneously. a. What is the quantity produced by each firm?

b. Do both firms charge the same price for the product? If so, what is the price? If not, what price should each firm charge?