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Need help answering this. 3. (20 points)) An industry consists two firms with identical costs C(q) = 10q + q2/2. The market demand is Q

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3. (20 points)) An industry consists two firms with identical costs C(q) = 10q + q2/2. The market demand is Q (P)= 300- P. Round all answers to the nearest whole number. Assume firm 1 chooses its output level first and then firm two responds by choosing its output level. (1) Derive the best response function for the follower firm. E What is the optimal output level of Firm 1? Solve for the output level of Firm 2. (iii) (iv) What is the equilibrium price, and profit per firm? Why is it important that Firm 1 believe that Firm 2 cannot change its output level once it has committed

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