As in the prescribed book, we use the comma $(,)$ to separate thousands, and the full stop $(.)$ as a decimal point.

ANSWER THE QUESTIONS AS DIRECTLY AS POSSIBLE AND EXPLAIN YOUR ANSWERS. ALL WORKINGS MUST BE SHOWN OTHERWISE, FULL MARKS WILL NOT BE AWARDED.

QUESTION $1$

Suppose a large steel manufacturing industry consists of $\mathrm{????}$ identical firms and the market demand curve is $\mathrm{????}=\mathrm{????}-\mathrm{????}\mathrm{????}.$ Each firm's total cost is $0\mathrm{.}5\mathrm{????}2+1.$

$($a$)$ Find the Cournot equilibrium quantity per firm.

$($b$)$ Find the Cournot equilibrium market quantity and price.

$(5$ marks$)$

$(3$ marks$)$

c$)$ Find the Monopoly market quantity, markup, and elasticity of demand.

$(3$ marks$)$

d$)$ Find the Duopoly market quantity, markup, and elasticity of demand.

$(3$ marks$)$

e$)$ Find in the perfectly competitive markets, the markup and elasticity of demand. $(3$ marks$)$

f$)$ Assume that D$-1$ Firms merged into Firm $1,$ as a leader produces quantity M$.$ Whereas the unmerged firm becomes Firm $2,$ a follower producing quantity $\mathrm{????}.$ The inverse market demand curve is given by $\mathrm{????}=280-2(\mathrm{????}+\mathrm{????}).$ Firms $1$ and $2$ have marginal costs equal to $40,$ respectively.

$($i$)$ Assuming duopoly, find the reaction function, equilibrium output and price. Plot the reaction function and show the equilibrium quantities.

$(7$ marks$)$

$($ii$)$ Find the Stackelberg equilibrium quantities and price.

$(4$ marks$)$

$($iii$)$ Using well annotated diagram show the Stackelberg equilibrium in $($i$).$

$(3$ marks$)$

QUESTION $2$

a$)$ In the reward program of leading fast fast$-$moving consumer goods market there are only two firms. Firms A and $\mathrm{????}$ should decide whether to offer a frequent buyer program to their customers. The annual profits of Firms A and $\mathrm{????}$ associated with each strategy are summarized in the following table below.