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The question above is the 1 I need help with and the second information is about the previous questions. QUESTION 6 (Trade Protectionist Question) Suppose

The question above is the 1 I need help with and the second information is about the previous questions.

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QUESTION 6 (Trade Protectionist Question) Suppose the government imposes a tariff of t=5. What will be the equilibrium output and profit for each firm? (Hint: If you feel confident in your answer on the previous questions, you can simply plug in t=5 into your answer there, as you've already solved for Nash equilibrium for any t.) O Q 1=33, Profit for Firm 1 = 1089 Q 2=30, Profit for Firm 2 =900 O Q"1=30, Profit for Firm 1 = 900 Q 2= 33, Profit for Firm 2 = 900 O Q"1 =30, Profit for Firm 1 = 900 Q 2= 33, Profit for Firm 2 = 1089 O Q"1=30, Profit for Firm 1= 1555 Q 2=33, Profit for Firm 2 = 1555 Trade protectionism has always been a contentious political issue, and goes all the way back to Alexander Hamilton's argument for protecting "infant industries". Let's examine how such a trade protectionist policy may work: Suppose there are two firms, Firm 1 and Firm 2, and that the demand curve in the industry is given by P = 100 -Q, -Q2 . If Firm 1 is the "experienced foreign firm" and Firm 2 is the "inexperienced infant firm", the argument goes that the experienced foreign firm will have had enough time to achieve lower costs of production. Hence, protecting the infant industry would amount to imposing a tariff of the foreign firm, which essentially increases that firm's costs in order to make the infant industry more competitive. To that end, suppose that TC(Q,) = (2+ 1)Q1 and TC(Q2) =4Q2 . Notice that when there is no tariff (1=0), Firm 1 does in fact operate at lower costs than Firm 2. Let's analyze this scenario by beginning to solve for each firm's best response function. In this case, we have that MR, = 100-2Q1 -Q2 ; MC1 = 2+1 and MR2 = 100-Q1 - 2Q2; MC2=4 Solve for each firm's best response

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