Consumers only care about their prices, and will purchase from the cheapest firm. If they charge same price, the quantity demanded will be equally split between the two firms. The market demand is given by QD(P)=403P, where P is the lowest between the two prices (pA,pB) The costs for each firm is 4 times the quantity they produce/sell: C(q)=4q for both firms For items (a)-(d), assume that both firms are charging $6,pA=pB=6 : a) What is the market quantity? b) What is the quantity sold by firm A ? c) What is the quantity sold by firm B? d) What is firm A's profit? For items (e)-(i), assume firm A is charging $6, but firm B is charging $7,pA=6,pB=7 e) What is the market quantity? f) What is the quantity sold by firm A? g) What is the quantity sold by firm B? h) What is firm A's profit? i) What is firm B's profit? j) If firm B increased its price, for example, to $8, should your answers to (e)-(i) change