Question 7 (Monopoly Behavior). Suppose Ford sells cars in Canada and the US. The inverse demand for cars in Canada is p₁(q₁)=20,000-20q₁. The inverse demand for cars in the U.S. is p₂(q₂)=25,000-10q₂. The cost for Ford of producing cars is given by: c(q)=500,000+20q² .

a) How many cars will Ford sell in Canada and at what price? How many cars will Ford sell in the US and at what price?

b) What will Ford's profits be?