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2) The following is a Cournot Duopoly model, where the two firms sell differentiated products and so they face different prices for the same quantity of demand. Assume that there are no production costs. The demand for Firm 1 and Firm 2 is as follows: P1 = 7 1 / WN / W P2 = 7 2 42 2 a. Given q2 chosen by Firm 2, what is the profit to Firm 1 from selling q1? b. Find Firm 1's best response function given q2 by differentiating Firm 1's profit with respect to q1 . c. Derive Firm 2's best response function in the same way. d. Draw the two best response functions and mark the intersection. e. What is the Cournot - Nash Equilibrium