Consider a country, say Home. In Home, the total demand for computers is given by: Q = 50 - (1/2)*P, where Q and P represent quantity and price, respectively. There are two firms that produce and sell computers, say Firm A and Firm B, and they compete in quantities. Therefore, the market structure is duopoly and there is Cournot competition between the two firms. The marginal cost of Firm A to produce computers is $20 per unit. On the other hand, the marginal cost of Firm B to produce computers is $24 per unit. There is no fixed cost of production.

(a) Derive the equation for Firm A's reaction function. Show your work.

(b) Derive the equation for Firm B's reaction function. Show your work.

(c) Plot reaction functions of each firm on the same figure. Indicate intercepts and slope of each reaction function. (Put Firm B's quantity on the vertical axis and Firm A's quantity on the horizontal axis.)

(d) Find the market price as well as the quantity produced by each firm in equilibrium. Show your work. (3 marks) (e) Calculate each firm's profit. Show your work.