Please see question in JPEG and let me know if any other info needed.

4. Bertrand Competition Consider the same demand and cost functions from Question 2. Assume there are two firms in the market. Suppose the firms compete on prices: each firm simultaneously chooses a price, and then the firm with the lower price sells units of goods corresponding to market demand; no consumers buy from the firm with the higher price; if the firms post the same price, then they each sell to half of the consumers. (30 points) (a) What will be the equilibrium prices and quantities for each firm? How much profit will each firm make? (7 points) (b) How much would the firms be willing to pay in lobbying to government officials to allow them to merge and be a monopolist (for one period)? (8 points) (c) Suppose that Firm 1 runs an advertisement offering its goods at the monopolist price (from above) but promises that it will honor its competitor's prices. That IS, if Firm 2 offers a lower price then consumers can get the same low price at 2 Firm 1. Once the advertisement runs, Firm 1 is legally committed to this pricing policy. Assume that if Firm 1 matches Firm 2's prices, then both firms sell to half the market. What price should Firm 2 set in response? What will be the equilibrium outcome of this market (prices, quantities, profit levels for each firm) given Firm I's pricing policy followed by Firm 2's response? Is price-matching a 'competitive" behavior or is it actually anti-competitive? (15 points)