Question 8 5 pts In a market that operates under quantity competition there are 2 firms (Cournot duopoly). The inverse demand function is P = 240-2 Q. The cost structure of firm 1 is given by C,(q,) = F, + Cr q, and that of firm 2 is given by Ca(qa) = Fa + C2 q2. Prior to competing, the two firms can engage in research at levels (x, , x2) respectively in order to lower their marginal costs. As a result, marginal costs are c, = 40- X; - B2 *2 and c2 = 40- x2 - B, x,, where 8, = 0.75 and By = 0.625. Finally, the research costs are F, = 3 (x, )/2 and F2 = 4 (x2)212. If the two firms can coordinate their research efforts then the cooperative research levels (X, . x2) are closest to the following: O 14 for firm one and 10 for firm two. 28 for firm one and 22 for firm two. 19 for firm one and 20 for firm two. 7 for firm one and 5 for firm two