Consider 2 firms in a Cournot game, firm 1 and 2, both have the same market demand curve of Q=4008P. The two firms total cost functions are TC1=30Q and TC2=50Q respectively. Must show work.

d. (5 points) At Nash equilibrium, what is each firms profit?

e. (5 points) At Nash equilibrium, what is each firms markup (Lerner Index)?

f. (5 bonus points) Does the Lerner rule apply to these firms? Explain or demonstrate mathematically.