The can industry is composed of two firms. Suppose that the demand curve for cans is P= 100- 0.5Q and the total cost function of each firm is TC = 2 + 20q.

• b)If only one firm enters a new market, how much will each firm produce and will make the profit?
• c)If both enter the new market, how much will each firm produce and will make the profit?
• e)If these two firms collude and they want to maximize their combined profit, how much will the firm A produce? And Profit?
• f)How much will the Firm B produce?
• g)Is this collusion would work? Why or why not?
• h)If the Firm A moves first, how much profit for each firm will change? Construct the game tree and find Nash EQ