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Consider again the Cournot oligopoly with two rms: where the demand curves were given by '= _ _') r1130 Q1 HQ; '3 P =1502Q1Q2 .

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Consider again the Cournot oligopoly with two rms: where the demand curves were given by '= _ _') r1130 Q1 HQ; '3 P =1502Q1Q2 . 1 1 q and costswere given by TC( Q l) = E {221 _..-11C1= Q1: 71192) = :Q'z- and MC2= Q2. Also. marginal revenues can be written as MR1: 150 2Q t_ 2Q? MR2: 150 2Qt_ 2Q2. Now. suppose that a marketing company approaches rm 1 and tells them that they can help them differentiate their product, so that instead of rm 2 affecting their demand curve in the manner described by the equation in P1 above__ they guarantee that lm 1's demand equation alter marketing will be of the form PL=130 Ql{JQZ where It} is estimated to lie somewhere between 0 and 1. In this case, rm 1's marginal revenue function would be MR1: 1:30 2Q Lfoz. and marginal costs would be the same_Knowing only that p will fall somewhere between D and 1: what is the maximum amount rm 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 decimali'rounding error: please choose the range within which the correct answer falls).

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