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Could anyone please help me with these questions? Use the following setting for questions 1-3. Firms 1, 2 and 3 compete in quantities. The inverse

Could anyone please help me with these questions?

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Use the following setting for questions 1-3. Firms 1, 2 and 3 compete in quantities. The inverse market demand is given by p = 600 - (91 + 92 + 93), where q1, 92, 93 are the quantities produced by firms 1, 2 and 3, respectively. The marginal cost for firm 1 is c1 = 40, and the marginal cost for both firm 2 and firm 3 is 60. The order of play is as follows: Firm 1 first sets a quantity q1. Then, firms 2 and 3 observe q1 and simultaneously set q2 and 93. Each firm sets its quantity to maximize its own profits. 1. Let us first consider the optimal action of firm 2. Given a value q1 initially set by firm 1 and a value of q3 set by firm 3, what is the value of q2 that maximizes the profits of firm 2? (a) q2 = 180 (b) 92 = 270 - 91 (c) 92 = 120 - 93 (d) 92 = 270 - 91 (e) 92 = 200 - 91 93 2. Notice that, after firm 1 sets q1, a subgame starts, in which firms 2 and 3 simultaneously set 92 and q3. Given q1, find the value of 92 that firms 2 must set in a Subgame Perfect Nash Equilibrium. (a) 93 = 180 - 9 (b) 93 = 150 (c) 92 = 270 - 9 93 (d) 92 = 120 - 93 (e) 92 = 270- 91 3. What is the price in the unique SPNE? (a) p* = 100 (b) p* = 120 (c) p* = 140 (d) p* = 160 (e) p* = 180

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