An industry consists of two firms, each of which have variable costs of $10 per unit but no fixed costs. The industry demand curve is P = 70 - Q. Now suppose that firm 1 is a Stackelberg leader while firm 2 is a follower. Assume, as usual, that the follower behaves like a Cournot duopolist (that is, assumes that the leader's output is fixed). How will each firm behave (in terms of reaction functions)? (a) What will each firm produce. [8] (b) What profits will the Stackelberg leader make? [2]