Take the following demand function for a duopoly market for Firm 1 and Firm 2:

Assume the following total cost functions for Firm 1 and 2.

Assuming constant marginal cost for both firms and that market output is represented by the output of Firm 1 and Firm 2.

a)Calculate the output-reaction curves for Firms 1 and 2 (show all workings)(4 marks)

b)Calculate the profit maximising level of output for each firm and the Cournot equilibrium market quantity and price.(4 marks)