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Please can you help me with QUESTION B ONLY . The information above is needed to answer the question. Please can you explain all the

Please can you help me with QUESTION B ONLY. The information above is needed to answer the question. Please can you explain all the steps you take in getting the correct answer and please reference and point out any economic models that you use . Thank you very much for your help, I will leave a fantastic review. Thanks Again for your time :)

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Consider a pharmaceutical market served by two rms, rm 1 and rm 2. The two rms produce vaccines and compete to maximise own prots. Suppose that the demand of vaccines is given by p = a b Q where Q = q1 + (12. Suppose that the two rms incur production costs equal to C1011) = C1611 620512) = 62612 Suppose that the two rms move simultaneously, c1 = (:2 = c and a > c > 0. Derive and describe the Cournot/N ash equilibrium and provide a graphical representation of the best response functions. [10 marks] Suppose that the two rms were considering a merger. Would this be benecial in terms of welfare? Provide economic intuition. [15 marks] Suppose that the government decides to partially nationalise rm 1. The presence of the government in the board of rm 1 induces rm 1 to target the joint maximisation of own prots and consumer surplus. Assuming that rm 2 continues to target the W of own prots, derive and describe the equilibrium, and compare it to the equilibrium that you have found in part a. [25 marks]

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