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QUESTION1 Two firms (they are the only two rms) in the maple syrup industry compete in the following game. Each simultaneously chooses a quantity of
QUESTION1 Two firms (they are the only two rms) in the maple syrup industry compete in the following game. Each simultaneously chooses a quantity of Isyrup to produce. Their costs are CA : Eqi and CB : q while the demand for maple syrup is D = 36 7 2P. What is the lowest discount rate such that the following strategy is a Subgame Perfect Nash Equilibrium? The two firms choose qA : qB : 6 as long as neither firm has ever chosen a different quantity and the two firms play the Nash Equilibrium of the one shot game forever if any firm has ever chosen a different quantity. (Include an answer accurate to 3 or more decimal places)
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