Question 4 Market demand is given by P (Q) = 140-Q if Q

Question 4 Market demand is given by 140-Q if Q < 140 otherwise o There are two firms, each with unit costs E20. Firms can choose any quantity. I. Define the reaction nmctions of the firms; 2. Find the Cournot equilibrium; 3. Compare the Cournot equilibrium to the perfectly competitive outcome and to the monopoly outcome. 4. One possible strategy for each firm is to produce half of the monopolist quantity. Would the resulting outcome be better for both firms (Pareto dominant)? Explain why this is not the equilibrium outcome of the Cournot game.