solve all the questions

= Question 5 (Lecture 7) Suppose firm A and firm B produce differentiated goods. The inverse demand curve for firm A is Pa = 20 9a 98. The inverse demand curve for firm B is PB = 20 9A - (b + 1)98 where b follows from your student number. The cost functions of the two firms are the same: Ci = 5Qi, where i = A, B. a) Find the best response functions for each firm in a Nash-Cournot equilibrium and illustrate them in a diagram. (4 marks) = b) What are the Nash-Cournot equilibrium quantities? (2 marks) c) Suppose firm B receives a 3 subsidy per unit produced from the government. What are the new Nash-Cournot equilibrium quantities? (4 marks)