Assume two firms A and B, each in a different country A and B, are competing in quantities as in the Cournot Duopoly model.

a)If both firms export all their production to a third country, would the government in country A commit to a unilateral export subsidy to their domestic firm? Explain using relevant theory and economic intuition. (40%)

b)How would your answer in a) change if governments in both countries could commit to an export subsidy? Explain using relevant theory and economic intuition. (30%)

c)How would your answer in (a) change if we assumed a perfectly competitive market structure and country A was an exporter to country B? Explain using relevant theory and economic intuition. (30%)