1. There are 2 car manufacturers in Lagos, Fola and Aliyu. Their cars look the same and no one can tell the difference in quality. Aliyu has a constant marginal cost of 1 dollar per car produced and Fola has a constant marginal cost of 2 dollars per car. Fixed costs are the same for them both and equal to 0. The inverse demand function for cars is p = 6 - 0.01z, where z is the total number of cars produced each day

• What type of oligopoly is this?
• Suppose both manufacturers choose their production levels simultaneously, use Za to denote Aliyu's production choice and Zf to denote Fola's production choice. Find Aliyus reaction function given Folas output.
• Find Folas reaction function given Aliyu's output.
• Solve for the equilibrium quantities under this type of oligopoly.
• What is the price of cars in this equilibrium?
• How much profit does each manufacturer earn in this market?
• Suppose Fola gets up an hour earlier to oil his equipment and gets his car production started before Aliyu gets up. What type of market is this?
• Now, solve for the equilibrium quantities under this scenario