There are two firms in an industry. Each firm can try to convince the Congress to give a subsidy. Let hi, (i C {1, 2} ) denote the number of hours of effort put in by firm z (treat hours of effort as a continuous variable). Let ci (hi) = hy denote firm i's cost of putting effort hi. The subsidy that each firm receives is: a(h1 + h2) + B(h1 x h2). where 0