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Consider two firms named F1 and F2, producing quantities qt and :12 of a commodity respectively, with constant marginal costs c1 = :2 = 4 x s , respectively. wince 5:10. The two rms face the Inverse demand functlon p = zoo - Q. where Q = qt + o: and are In Stadnelberg oompetltion with rm F'l moving rst. (i) Compute the equilibrium quantities qi' and q; produced and the corresponding equilibrium price p\" in this market. (ii) Suppose that this market takes place repeatedly in days if = {1, 1,21 . . .. At t = {i rm F1 sets an output 91,0 > of and each day thereafter it adjusts output according to the process: 41,: = ins1 +o(qf rim1), where o E {1, 2). Study the resulting dynamic process and compute the time path of the equilibrium price. (iii) Explain carefully whether or not some day{s) is (are) more favorable to purchase this com- modity. (iv) Suppose you have decided to buy this commodity after t = s when you receive your salary. where s: 10 Explain whether or not there is some day most favorable to make your purchase. [21] marks]