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Question 8. (11 points) Suppose that two firms, Firm A and Firm B, are producing identical products in an isolated market. The demand for the

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Question 8. (11 points) Suppose that two firms, Firm A and Firm B, are producing identical products in an isolated market. The demand for the products in the market is p = a - Q. Each firm has a cost function 7 = + dQ a. (9 points) Determine the equilibrium quantities of each firm if firm A is the Stackelberg leader. b. (2 points) How does a decrease in fixed cost, c, affect the equilibrium quantities of the firms? Explain your answer briefly

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