2. Consider the following Cournot oligopoly model. There are two firms, 1 aud 2 producing a homogeneous product. The market demand is p(Q) = 1 Q, where Q = ql + [12; qi 0 is the output produced by firm i = 1, 2. Firm 1 has a marginal cost MCI(C/I) O, that is the cost function is Cl(ql) = O. Firm 2 has cost function C2(q2) 2 Thus the marginal cost for firm 2 is MC2(T2) = (12. The two firm's simultaneously set their quantities and their objective is to maximize their respective profits. (a) Suppose firm 2 decides to produce = i. Does there exist an output level of of firm 1, (11, such that 42 is a best response to ? (b) (c) Find the reaction functions for firms 1 and 2 and plot them in a graph Solve for the Cournot-Nash equilibrium in this model.