8. a) Suppose a firm A produces a product q, but also pollution x that affects a second firm B. Firm A is a competitive firm and faces an equilibrium price of $12 for its product. The cost function of firm A is CA(q, x) = q2 + (x - 4)2. Firm B is a competitive firm and faces an equilibrium price of $10. Firm B's cost function is CB(r, x) =r2 + xr. Compute the equilibrium prices and quantities and the profits of the two separate, competitive firms. Interpret the first order conditions. Explain. (3 marks) b) Compute the social optimum, that is, the equilibrium prices, quantities, and profit when firm A and B are merged. Interpret the conditions and compare it to the solution in (a). Explain