Problem 3. Two firms, AbleCow and Betsy's Pride, are competing in the market for milk in Lean City. . AbleCow firm sells only 2 percent milk, while Betsy's Pride sells only skim milk, which is 0 percent milk-fat. . 100 consumers in Lean City have varied taste for milk. Specifically, consumers ideal percentage of milk-fat is uniformly distributed between 0 and 2. . Consumers value their ideal percentage milk-fat milk at $6 per gallon. For other milk, they are willing to pay $1 less for each percentage point that milk differs from their ideal.I The two rms set prices simultaneously. The cost of milk for both rms is $3 per gallon. - Only one gallon cartons of milk are available, consumers buy at most 1 gallon of milk. 1. For a consumer with ideal milk-fat percentage :1: {between {1 and 2}, what is the utility of purchasing milk from AbleCow at price p\"? 2. For a consumer with ideal milk-fat percentage :1: {between {1 and 2}? what is the utility of purchasing milk from Betsy's Pride at price pt? 3. Write an expression that gives the ideal milk-fat percentage of the consumer who is indifferent between buying AblcCow and Betsy's Pride given prices pa 3.: pb. 4. Write down demand for each rm. 5. What are the best response functions of each rm? 6. What are equilibrium prices for each rm? T. Suppose that consumers don't care about milk-fat percentage. That is, the].r treat the two goods as homogeneous. What are equilibrium prices for each rm