The next two questions rely on the following information: Consider a market with inverse demand P(Q) = a -bQ, a, b > o with two identical firms selling identical goods with marginal cost c 2 0 and no other costs of production. Three forms of competition are considered where (1) both firms choose their quantities simultaneously, (2) one firm chooses their quantity first (denoted the leader) and the other firm chooses their quantity having observed the other firm's quantity (denoted the follower) (3) where both firms choose their prices simultaneously. (Multiple Choice) The equilibrium total consumer welfare from these three forms of competition car be ranked from best to worst as O (3) > (1) > (2) O (3) > (2) > (1 ) O (2) > (1) > (3) O (1) > (2) > (3) O None of the options are correct (Multiple Choice) Of the three forms of competition, consider cases (1) and (2). Which of the following applies? Both the leader and follower in (2) earn more than they do in (1), and total producer surplus increases. Both the leader and follower earn less in (2) than they do in (1) and total producer surplus decreases. The leader earns more but the follower earns less in (2) than they do in (1) and total producer surplus increases. O The leader earns more but the follower earns less in (2) than they do in (1) and total producer surplus decreases