Suppose two firms that produce a homogeneous product and simultaneously choose the quantity they are going to produce. The demand curve for the good is P = 10 ? y₁ ? y₂ and firms have total cost curves C₁ = 2y₁ and C₂ = 3y₂. (a) Find the reaction curves for the two firms. (b) Calculate the quantities (y₁^? and y₂^?), the price (P) and the profits (?₁^? and ?₂^?) in equilibrium. (c) Let ? (y₁, y₂) = ?₁ (y₁, y₂) + ?₂ (y₁, y₂) be the joint profit as a function of quantities. calculate and Interpreter.

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