Please submit your answers as a single PDF document 1. (15 points) List three reasons to buy an input rather than making it. Give examples where each reason would be relevant. 2. (25 Points) Consider a cournot competition environment where demand is given by P : 150 (Q1 + Q2) and each rm has TC : 10Qz- A. Find each rm's prot as a function Q1, Q2 B. Optimize and nd Q1 as a function of Q2 and Q2 as a function of Q1 C. Find equilibrium Qland Q2 and prot for both rms. 3. (25 Points) Consider a differentiated Bertrand monopolistic competition environment where demand for each rm is given by Q1 : 100 5P1 + P2 and Q2 : 100 5P2 + P1.each rm has TC : 10622 A. Find each rm's prot as a function P1, P2 B. Optimize and nd P1 as a function of P2 and P2 as a function of P1 C. Find equilibrium P1 and P2 and Q1 and Q2. 4. (35 points) Alexandra and Beatrice are deciding where to live during col lege. Alexandra can live at her parents house which costs nothing and provides a value of $500 to her. Beartice can lease an apartment by herself providing a value of $1000 at the cost of $600. Alexandra and Beatrice can also live together which still costs $600 and provides $1000 of value to both. Beatrice already lives in the apartment, but to move in will cost Alexandra $100. A. Find the outside option value for each person Ex Ante B. What is the maximum total benet generated by people working together? C. Find the mash bargaining payoff for each person. Ex Post Now assume that Alexandra has moved in and incurred the cost. Alexandra cannot live with her parents unless she moves back, costing another $100. D. Find the new outside option for each person. E. Find the new nash bargaining payoff for each person