In Austin, Texas, there's only one way to see the city - duck boat tours. If you are in the Texan capital, you are likely to see groups of bachelor parties, college students and corporate retreats driving around the city in these amphibious tour buses. Riders quack their way through the streets before descending into the waters of Lake Austin on their vehicleturned-boat.

There are only two licensed duck boat operators: What the Duck (WD) and Duck Town (DT). They offer essentially identical tours.

The market inverse demand curve is P = 200 - 4Q

Where Q is duck boat passengers per day and P is price per passenger.

The firms' marginal costs are MCWD = 16 MCDT = 24

1. What price should each firm charge? How many passengers will each firm serve?
2. The Austin city council wants to encourage more tourism and has passed a law which eliminates the license requirement for duck boat operators. Duck Town (DT) has decided to cater to more upscale customers whereas the owner of What the Duck (WD) wants to keep duck boat rides accessible to "the people". FULLY explain what happens in this market.