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Consider again the Cournot oligopoly with two firms, where the demand curves were given by P = 150- 0 -202 P2=150-201- 22 and costs were

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Consider again the Cournot oligopoly with two firms, where the demand curves were given by P = 150- 0 -202 P2=150-201- 22 and costs were given by TC ( Q,) = 202, . MC, =0,. TC(02) =202, and MC2=22 Also, marginal revenues can be written as MR , =150-20,-20,. MR, = 150-20, -202 Now, suppose that a marketing company approaches firm 1 and tells them that they can help them differentiate their product, so that instead of firm 2 affecting their demand curve in the manner described by the equation in P, above, they guarantee that firm 1's demand equation after marketing will be of the form P =150- Q -BQ2 where @ is estimated to lie somewhere between 0 and 1. In this case, firm 1's marginal revenue function would be MR = 150-20 - BQ 2 and marginal costs would be the same. Knowing only that & will fall somewhere between 0 and 1, what is the maximum amount firm 1 should be prepared to pay for these marketing services? (There is an exact answer to this question, which I hope for you to arrive at. But in order to avoid decimal/rounding error, please choose the range within which the correct answer falls) Between $0 and $1000 Between $100 and $2000 Between $2000-$3000. More than $3000

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