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Please see picture for question Inverse demand curves are given below 3. In our third setup, there are four rms. Two rms who are identical

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Please see picture for question

Inverse demand curves are given below

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3. In our third setup, there are four rms. Two rms who are identical with each other produce type 0 cars. Two other rms that are identical with each other (but not with the rst two) produce type 1 cars. Each rm maximises prot-s given the output levels of the other three rms. The originally specied demand functions, {1), still apply to each type of car, and the originally specied cost functions, [2), still apply to individual rms. For example, if rms A and B produce type 0 cars, and rms C and D provide type 1, then Q0 = 1354 + qB and Q1 2 19 + :99 and the cost functions are: GAGA) = 50%, 03(qu = 50913, Ochre) = 20th:, 09011)) = 20(19- (a) Write down a prot expression for a representative rm providing type 0 cars, and the prot expression for a representative rm providng type 1. (b) Take rst-order conditions (c) What would the tax rates 79,11 have to equal, in order for the equi- librium quantities (2'le to be the same as the values you found in question 1(d)? Feel free to assume that two identical rms producing a type of car, will provide the same amount as each other. (d) How does your answer to 3(c) compare with your answer to 1(d)? What is the intuition for this

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