Suppose Mohamed and Sara own two identical firms, which produce medical masks and that they are the only firms in the market. Mohamed's cost function is: C1= 60Q1, and Sara's cost function is C2 = 60Q2, where Q1 is the output of Mohamed's firm and Q2 the output of Sara's firm 2. Price is determined by the following demand curve: P= 300 - Q where Q= Q1 + Q2.

1. Calculate the Cournot equilibrium amount of output for each firm?

2. Suppose there is a learning process in which Mohamed and Sara refine their beliefs about the other firm's behavior by observing its actual choice of output. Show using graphical representation, when the Cournot equilibrium will be stable and explain its intuition.

3. Suppose that Mohamed and Sara form a cartel to maximize their joint profits. Show using graphical representation that Mohamed and Sara cannot do worse by colluding.

4. Given their collusion, how many masks will be produced? Calculate each firm's profit.