Consider a pair of oligopolists (duopolists) with the following cost functions: C =20000+2(Q1) C2 = 30000+ (Q2) These firms are in a market in which the (inverse) demand function is as follows: A. P 3600 Q1 - Q2 - Suppose that the firms colluded (formed a cartel). Find the profit-maximizing quantities for each firm. B. Find the profits earned by each firm under this arrangement. C. Show that firm 2 has an incentive to cheat on the arrangement. D. E. F. G. H. Find the reaction functions for each firm, and show a few iterations of how they might go from the collusive arrangement towards the Cournot outcome. (Start with firm 1). Find the Cournot Equilibrium for this situation. Compare the quantities, price, and profits of the Cournot outcome to collusion. Comment on the apparent paradox. Find the Stackelberg outcome. Compare the quantities, price, and profits in the Stackelberg outcome to the 2 models above, and comment.