Consider a market with two firms (firms 1 and 2). The (inverse) demand curve is: p = 30 - 2q where q= q1 + q2

Suppose Firm 1 has a marginal cost (c1) of 6 and Firm 2 has a marginal cost (c2) of 12. Assume neither firm has a fixed cost.

(1) Suppose firms choose quantities simultaneously. Calculate the best response functions and the Nash Equilibrium.

(2) Calculate Consumer surplus and producer surplus at the Nash equilibrium.