QUESTION 16 Consider an industry with two firms that compete in quantities. Both firm have identical cost functions given by TC (q ) =30q . where i=1.2 with constant marginal costs of 30. Market demand is given by P= 120-q, - 4,. so that firm 1's marginal revenue is MR = 120-2q, - 4, and firm 2's marginal revenue is given by MR. = 120- q, - 29,. Calculate firm 1's quantity in Nash equilibrium. 30 QUESTION 17 Instead of competing in quantities, the two firm's decide to collude and form a cartel. Assuming that both firm's stick to the Cartel agreement, calculate how much additional profit each firm makes compared to Cournot competition