QUESTION 7.3 Two firms face a demand equation give by P-2,000-6(q,+ q) where q and q are the outputs of the two firms. The total cost equations for the two firms are given by TC,=800q and TC.=800g The marginal cost for each firm is 800. a. If Firm 1 believes that Firm 2 will produce 100 units, how many units should Firm 1 produce to maximize profits? N What will be the price? N How much profit will each firm eam? N b. If the firms collude, what will be the monopoly price and output? N If profits from collusion are shared equally, how much profit will each firm eam? N