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Please help me out with this practice question (parts A-E)! Thank you! Question 1(part ae).[40points] Consider a. world where Ford (rms 1), Chevy(rm 2), and

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Please help me out with this practice question (parts A-E)! Thank you!

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Question 1(part ae).[40points] Consider a. world where Ford (rms 1), Chevy(rm 2), and GMC(rm3) are the only producers of pickup trucks in the US. They are ercely competing with one another and want to maximize prot by setting quantity of production. The three rms have the same costs of production. Firm 1 selects quantity [11 and pays the production cost of 291. Firm 2 selects quantity qg and pays the production cost 2:32. Firm 3 selects quantity Q3 and pays the production cost 2.33. The market price is given by p = 18 ql qg (13. Thus, the payoff functions are u1(q1, (12,913) = (18 ql qz Q3)Q1 291, 152011: 92,1313) = (18 (11 (12 Q3)Q2 21312: and H3(Q1, [1'2, (13) = (18 Q1 Q2 Q3)Q3 293 for rm 1,2 and 3, respectively. Assume consumers equally prefer all three trucks. a.) * Calculate the firms' best-response functions BR1 (92, 93), BR2(q1, 93), BR3(q1, q2). (5 points) b.) * Find the Cournot Nash equilibrium quantities, profits, and price of firm 1, 2 and 3.(10 points) c.) * The three US firms decide to merge its companies and combine its production plants; their joint-quantity is denoted as Q. Find the joint-profit-maximizing quantity, price and profit. (10 points)d.) * Now, further assume that US relaxes its trade policy, and Toyota enters into the competition with the existing three US firms. Toyota is known to be able to make pick-up trucks at a cheaper production cost of qr. (half the cost of US firms) The newly-merged-US firms and Toyota are now setting quantities to maximize profits. The market price is given by p =18-Q - qr. Find the Cournot Nash equilibrium quantities, profits, and price for the newly-merged-US firms, and Toyota. (10 points) e.) From the previous part's answer, who benefits and loses from allowing foreign competition (Toyota) to enter the market?(5 points)

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