[Hart and Tirole (1990)]. Consider a monopolist upstream supplier U1 sell- ing to tw0 downstream producers D1 and D2 engaged in Coumot competi- tion. Downstream demand is described by: P = 100 - Q and marginal cost is zero at both the upstream and downstream level. a. Show that the monopoly level of out- put is 50 and that monopoly prot is $2500. Imagine a contract by which U l sells 25 units as a package to each of D1 and DZ at a price of $1.250. Each rm can either accept the package or reject it. Show that if decisions are made simultaneously. and each rm has full information about the other's actions, the Nash Equilibrium is for each to accept this offer