Suppose the inverse demand mction for the two firms: P=50(Q1+Q2) Cost fLutctions for the two firms are c1(o1)=2o1 C2(Q2)=2Q2 Suppose firm 1 is leader, and firm 2 is the follower: What is firm 2's reaction function? What is firm 1's output? Mat is firm 2's output? What is the market price? Solve the above problem for Cournot model and compare the profit of both firms. *Key Terms* This Chapter talks about Bertrand Model Envirolnnent, Cournot Equilibrium, and Stackelberg Model Euvriomnent