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Problem 4 An industry consists of three firms engaging in Cournot Competition. Each firm sells identical products and produces at identical costs C(q) = 18q + q-. Market demand is estimated to be Q = 150 - p. 1. Write down the profit function for firm 1. 2. Solve for the Cournot best-response function for firm 1. 3. Compute the Cournot equilibrium level of total market output. 4. Explain why the above Cournot equilibrium is a Nash Equilibrium. 5. Compute equilibrium prices and profits for each firm.8. Two firms each produce an output of 10 units. The production process for each firm generates 20 units of pollution. Firm 1 can reduce pollution to 420 units, where 0