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6. (35 points) Consider a market with two rms in Cournot (quantity) competition. Mar ket demand is given by q(p) = a 3). Each rm

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6. (35 points) Consider a market with two rms in Cournot (quantity) competition. Mar ket demand is given by q(p) = a 3). Each rm faces a constant marginal cost of c. a. (15 points) Suppose that the government imposes a unit tax of 6, so that if a rm sells q units of the good, that rm owes q - 6 to the government. Find the equilibrium quantity, price paid by consumers, consumer Surplus, and tax revenue. Your answers should be functions of a, 1', and c. Make sure you box your answers. Hint: you can think of 6 as an increase in the rms' marginal cost

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