I. Solve the following exercises 1. We have the following linear market demand P(Q)=70Q (where Q=q1+q2 ), and production costs are symmetric and given by C=20qi, where i=1,2 i. What is the equilibrium quantity a la Cournout? ii. What is the equilibrium price a la Cournout? iii. What is the utility of both companies to the Cournout? IV. What is the reaction function (best response) of q1 and q2 v. What would be the equilibrium in prices a la Bertrand? vi. Based on game theory, calculate what the payoffs would be if firms 1 and 2 cooperate; company 1 cooperates and the other 2 does not cooperate; companies 1 and 2 do not cooperate and that company 1 does not cooperate and 2 does cooperate. I. Solve the following exercises 1. We have the following linear market demand P(Q)=70Q (where Q=q1+q2 ), and production costs are symmetric and given by C=20qi, where i=1,2 i. What is the equilibrium quantity a la Cournout? ii. What is the equilibrium price a la Cournout? iii. What is the utility of both companies to the Cournout? IV. What is the reaction function (best response) of q1 and q2 v. What would be the equilibrium in prices a la Bertrand? vi. Based on game theory, calculate what the payoffs would be if firms 1 and 2 cooperate; company 1 cooperates and the other 2 does not cooperate; companies 1 and 2 do not cooperate and that company 1 does not cooperate and 2 does cooperate