Suppose there are two firms,A and B, operating in a market and compete on output choices. No other firms can enter the market. Demand curve is P= 12000-100(Q_{A +} Q_B).

1) Calculate and draw each firms best response function. Q_A is y axis and Q_B is x axis

2) Solve for Nash Equilibrium output levels for each firm ,calculate market price and corresponding economic profits and show on graph

3) Suppose instead that the firm's colluded and acted as a a single monopolist. Demand curve is: P= 1200 - 100Q where Q = Q_A + Q_B and MC = $400. Calculate profit maximizing market output and price levels.Assume firms produces half output and splits evenly. What are output and profit levels for each firm.