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Two firms are operating in the market for laptops: Eppel and Samesong. Both firms are producing the same laptops in terms of size and quality.

Two firms are operating in the market for laptops: Eppel and Samesong. Both firms are producing the same laptops in terms of size and quality. Moreover, the total available laptops in the market are only produced by these two firms:

Q = Qeppelm+ Qsamesong

These two firms are facing a demand function equal to , = 250 0.5, but these two firms have different cost functions: to run each plant is slightly different given by:

Cepple= 15 + 2^2eppl

Csamesong= 10 + 2^2 samesong

a) Calculate your marginal revenue and marginal cost functions for each firm. (4 Marks)

b) Calculate how much each firm should be producing in order to maximise profits. (4

Marks)

c) Calculate the price at which the firms are maximising profits. (2 Marks)

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