Two companies supply in a market where the demand is = 60 . The cost function of company A is ( ) = 35 and that of company B is () = 20. Both companies play the Cournot strategy, i.e. each company maximizes its profit taking the output of the other company as given.

(a) Derive the best response function for both companies.

(b) What is the Nash equilibrium of this game? What is the equilibrium quantity and price on the market?

(c) If company B adopts a new technology, which changes its cost function to () = 300 + 8, how will it affect the Nash equilibrium in this game?