Strategic investment in Bertrand competition with differentiated goods In the market for electric cars, firm 1 is a pioneer who invests , in R.&D for efficient production. Firm 1's total production cost is given by Ci(q) = (10-b)q, +k?. The demand for firm 1's electric cars is given by q1 = 20-2p, +p2. On the other hand, firm 2 is a latecomer whose total production cost is given by C2(92) = 1092. The demand for firm 2's electric cars is given by q2 = 20 - 2p2 + p1. Assume the two firms compete by setting prices after firm 1 invests kj. 1. What are the equilibrium prices, (P1, p2), in terms of )? (Hint: find the best response functions.) 2. What is firm 1's optimal level of investment, k