Problem z - Two local concrete producers dominate the market in Concrete County: Firm 1 and Firm 2. The concrete produced by the two firms is identical. Throughout the problem, assume that there is no collusion between the firms. The two firms' total monthly costs are given by TC1 = 20, 000 + 200q1 TC2 - 40, 000 + 100q2 where q1 is the output of firm 1, and q2 is the output of firm 2 (in tons of concrete). The demand curve for concrete in Concrete County is as follows: P = 2000 - 2Q where Q = q1 + 92. Each firm decides how much concrete to produce, taking as given the output decision of the other firm. A. [1 point] Which type of competition do the twoch firm decides how much concrete to produce, ing as given the output decision of the other firm. A. [1 point] Which type of competition do the two firms engage in? B. [6 points] Compute the reaction function for each firm. [Hint: careful - are marginal costs the same?] C. [6 points] Find the equilibrium quantities and the price of concrete in Concrete Country. Calculate the monthly profit of each firm in equilibrium. D. [3 points] The owner of firm 1 reads in the WSJ that firms can compete on prices, and decides to pursue this strategy. Assume that firm 2 also responds by changing its price. What do we call this type of competition, and what is the most likely short-run outcome (market price and total quantity produced)