Exercise 2: Stackelberg in prices Suppose there are two firms in the market, a leader and a follower. Both have the same cost function: C(q) = cq and they face the following individual demands: qL (PL, Pf) = a - PL -Y(PL - Pf) qf (PL, Pf) = a - Pf - Y(Pf - PL) where a = 3, y = 0.5 and c = 1 a) (15 points) Find the equilibrium prices, quantities and profits