Problem 1 Two natural gas producing firms face the inverse demand curve P =50-50, where Q =Q1 +Q2- The firms' cost functions are Ci(01) = 20 + 1001 and C2(02) = 10 + 1202. a. Suppose both firms have entered the natural gas industry. What is the joint profit- maximizing level of output? How much will each firm produce? How would your answer change if the firms have not yet entered the industry? b. What is each firm's equilibrium output of natural gas and profit if they behave non- cooperatively? Use the Cournot model. Draw the firms' reaction curves and show the equilibrium