1. Joe and Rebecca are small-town ready-mix concreteduopolists. The market demand function isQd= 10,000 - 100P, where P is the price of a cubic yard of concrete andQdis the number of cubic yards demanded per year. Marginal cost is $25 per cubic yard. Suppose that Joe and Rebecca compete in quantities and competition in this market is described by Cournot model. What are Joe and Rebecca's Nash equilibrium outputs? What is the resulting price? What do they each earn as profit? How does the price compare to the marginal cost?

TR = 10000P - 100P2

MR = 10000 - 200P

10000 - 200P = 25

10000 - 200P = 25

9975/200 = P = 49.875

TR = 500000 - 250000

= 250000

TC= 25 x 5000 = 125,000

Profit = 125,000

They both earn 62,500 individually.

***please do the question that is bolded, the work above it helps correspond to the question***

Consider question 1 again but assume that Joe's and Rebecca's firms compete in prices rather than in quantities. Consumers perceive the ready-mix concrete produced by the two firms as identical products. Find the Nash equilibrium prices when the two firms set their prices simultaneously.