(5 points) Two firms are price-competing as in the standard Bertrand model. Each faces the market demand function D(p)=1000p. Firm 1 has constant marginal cost c1=250, while firm 2 has the constant marginal cost c2=500. If one of the firms has the lower price, they capture the entire market, like the standard model. HoweverIwhen they charge exactly the same price, firm 2 gets 75 percent of the demand, firm 1 gets the remaining quarter. (a) Draw the profit function 1(p1,p2) when p2=600. (Make sure to label all points of interest on all graphs: maximum values, axis crossings, points of discontinuity, axes labels) (b) Draw the profit function 2(p1,p2) when p1=600. (c) Write out the best-response correspondences B1(p2) and B2(p1) as functions of p2 and p1 respectively. (d) Is there an equilibrium for this game as defined? (e) Suppose S1=S2={0.00,0.01,0.02,,1000.00}. That is, instead of any real number we force prices in whole cents. i. Provide 2 Nash Equilibria in pure strategies for this game. ii. Calculate the profits for each firm under any one of these equilibria, accurate to the nearest cent. (5 points) Two firms are price-competing as in the standard Bertrand model. Each faces the market demand function D(p)=1000p. Firm 1 has constant marginal cost c1=250, while firm 2 has the constant marginal cost c2=500. If one of the firms has the lower price, they capture the entire market, like the standard model. HoweverIwhen they charge exactly the same price, firm 2 gets 75 percent of the demand, firm 1 gets the remaining quarter. (a) Draw the profit function 1(p1,p2) when p2=600. (Make sure to label all points of interest on all graphs: maximum values, axis crossings, points of discontinuity, axes labels) (b) Draw the profit function 2(p1,p2) when p1=600. (c) Write out the best-response correspondences B1(p2) and B2(p1) as functions of p2 and p1 respectively. (d) Is there an equilibrium for this game as defined? (e) Suppose S1=S2={0.00,0.01,0.02,,1000.00}. That is, instead of any real number we force prices in whole cents. i. Provide 2 Nash Equilibria in pure strategies for this game. ii. Calculate the profits for each firm under any one of these equilibria, accurate to the nearest cent