A local government plans to auction off a franchise to supply service to the town. The (inverse) demand curve for the service is P(Q) = 100 - Q, where P denotes price and Q denotes quantity. Only two firms, firm 1 and firm 2, are qualified to compete for the franchise. Firm 1's cost function: C(Q) = 10Q; Firm 2's Cost function: C(Q) = 20Q. The auction rules are as follows: The local government decides to award the franchise to the firm that promises the largest up-front payment to the government. The selected franchise operator is permitted to charge its preferred price for the service. The government employs an English auction awarding the franchise to the firm that promises the largest payment

Part A: Which firm will win the franchise?

Part B: What is the winning franchise fee be?

Part C: What price will the selected franchise operator charge for the service?