Problem 1. Let market demand in the cement industry be given by Q(P) = 200 P. There are only two rms in the industry that compete on quantities (Cournot Competition). The total cost function for rm 1 and rm 2 is T0011) = 204111 + 400 and T0012) = 20:12 + 400, respectively. 1. What is the marginal cost for both rms? 2. Represent the market price as a function of each rm's output, (11 and .92. 3. Find the bestresponse function of each rm. 4. Suppose rm 2 produces nothing, that is, q2 = 0. What is rm 1's optimal output level? Compare this quantity with the monOpoly output level. 5. Using the Cournot model, nd each rm's output, prot, and price in equilib rium