Assume a market with two firms, $1$ and $2,$ with multicharacteristic product differentiation. Respective demand and cost functions for firm i are: $p_i=a-q_i-d{q}_j$ and $T{C}_i=c{q}_i$: Assume that $a=12$ and $c=6($a little different from the book where

i$.$ If $d=0,$ what is the Lerner index? $($Solve for $p^{**}$ and recall that $L=\frac{p-MC}{p})$

ii$.$ If $d=1d=10$ and firms behave $as$ Cournot competitors, what $is$ the Lerner index?

iii. $Ifd=1(i.e.,$ homogeneous goods$)$ and firms behave $as$ Stackelberg competitors $(i.e.,$ firm $1is$ the leader and firm $2is$ the follower$),$ what $is$ the value $of$ the Lerner index?

$iv.Ifd=1,$ will market power $be$ greater $in$ the Cournot model $or$ the Stackelberg model?