Two firms sell identical products and compete as Cournot (price setting) competitors in a market with a demand of p 150 Q Initially, each firm has a constant marginal and average cost of $3 per unit of output a Compute each firm's best response function (or reaction function) (5 points) b Compute the Cournot equilibrium quantities for each firm Show your work (5 points)

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Two firms sell identical products and compete as Cournot (price- setting) competitors in a market with a demand of p = 150 - Q. Initially,

Two firms sell identical products and compete as Cournot (price- setting) competitors in a market with a demand of p = 150 - Q. Initially, each firm has a constant marginal and average cost of $3 per unit of output.

a. Compute each firm's best response function (or reaction function). (5 points)

b. Compute the Cournot equilibrium quantities for each firm. Show your work. (5 points)

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