Suppose there are two farmers, Altman (A) and Bloch (B), selling their avocados on the

farmers' market in the city. Assume that neither of them has any production costs. The

inverse demand for avocados on the market is given by = 10 0.1( + ), where

is Altman's quantity and is Bloch's quantity.

a) Suppose the two farmers act as Cournot duopolists. Write down A's profits. (3

points)

b) Write down the first-order condition for a profit maximum for A. (4 points)

c) What is the Cournot equilibrium price and quantity in the avocado market? (4

points) (Only the answer is needed. You can add computation steps.)

d) Altman tends to sleep late, so every day Bloch leaves for the market earlier.

Hence, Bloch sets a quantity first as a Stackelberg leader and Altman follows.

Which quantity will Bloch set? Which quantity will Altman set? (Only the answer

is needed. You can add computation steps.) (4 points)