Exercise n.2 Assume that / firms of country A compete with one firm of country B in a foreign market whose demand is given by p=4-bQ. All firms have the same unit cost c, where A>c. In the first stage the Government of country A sets a unit subsidy s that reduces the unit cost of firms of country A to c-s. In the second stage firms compete a la Cournot in the foreign market. The objective of the Government of country A is to maximise the profits of their national firms net of the subsidy 2.a) Derive the Subgame Perfect Equilibrium of the two stage game. 2.b) Is the equilibrium export subsidy always positive? 2.c) Suppose that M firms operate in country B. How would the previous results be affected