a) MC1=MR1

1: 10=100 - 2Q1 - Q2 Q1 * Q2 = 45- * Q2

2: 10=100 - Q1 -2Q2 Q2 * Q1 = 45 - * Q1

b) Q1=45 - (45 - * Q1) * Q1= 45 - 22.5 Q1* = 30

Q2*=45 - * 30 = 30 and Q* = 30 + 30 = 60 and p* = 100 - 60 = 40

Outputs= 30

Aggregate output= 60

Price=40

= (p* - MC) * Q1* = (40 -10) * 30 = 900

= (p* - MC) * Q2* = (40-10) * 30 = 900

I am having trouble with c,d,e

Suppose that a good is produced by two firms in a market. Each firm has no fixed cost and constant marginal cost of producing equal to MC1=MC2=10. The market demand for the good, Q, is: QD= 100 - P Marginal Revenues of the two firms are: MR1 = 100 -2Q1 -Q2 & MR2 = 100 - Q1 - 2Q2 a) If each firm behaves in a way consistent with the Cournot model, find each firm's reaction function. b) Find the aggregated and individual firm output, as well as price, under the Cournot equilibrium. Also find each firm's profit, given that they have no fixed cost. c) Imagine that Firm 1 has the opportunity to bribe a politician to have the second firm banned and receive sole monopoly rights. What would be the maximum bribe that Firm 1 is willing to pay? d) Instead of achieving a monopoly, suppose that Firm 1 gets to move first (leader) in the duopoly. [Hint: This ultimately gives it a marginal revenue of MR1=55-Q1.] How much will each firm produce and at what price under the Stackelberg model? Find the aggregated and individual firm output, as well as price, under the Stackelberg model. e) Calculate consumer surplus under the Cournot equilibrium outcome and the Stackelberg model outcome. Which type of duopoly is better for consumers