Study CaseResearch into the soft drink market indicates that the two firms compete by selectingquantities (Cournot competition). Soft drinks are regarded as a homogeneous good byconsumers, and inverse demand in the market is estimated to be, P = 6 ? Q/100,000, where P represents the price of a bottle of soft drink, and Q is the total number of bottles sold per year. At present soft drinks sell for $3.80 a bottle. Bubbles PLC produces 140,000 bottles peryear, paying $56,000 in bottle tax. CarbonCorp produces 80,000 bottles and pays $32,000.It is estimated that it costs Bubbles PLC $2.00 per bottle of soft drink produced, while producing a bottle of soft drink cost CarbonCorp $2.60. The fixed costs of production can be neglected in this analysis.Q1: Using the information provided in the scenario, derive a total cost function foreach soft drink producer for the case in which the government levies a tax of $1.00 perbottle. Note that a firm's marginal cost will be the sum of its cost of producing a bottle, and the tax that it must pay to the government on each bottlesold.Q2: Using the cost functions from step 1, derive a profit function for each firmQ3: Derive each firm's best-response functionQ4: Solve the best-response functions simultaneously to find the equilibrium quantitiesfor each firm.Q5: Find the equilibrium price and tax revenueThank you so much for your help.

Research into the soft drink market indicates that the two firms compete by selecting quantities (Cournot competition). Soft drinks are regarded as a homogeneous good by consumers. and inverse demand in the market is estimated to be. Q 100.000' where P represents the price of a bottle of soft drink. and Q is the total number of bottles sold per year. At present soft drinks sell for $3.80 a bottle. Bubbles PLC produces 140,000 bottles per year. paying 356.000 in bottle tax. CarbonCorp produces 80,000 bottles and pays $32,000. It is estimated that it costs Bubbles PLC $2.00 per bottle of soft drink produced, while producing a bottle of soft drink cost CarbonCorp $2.60. The fixed costs of production can be neglected in this analysis. P=6