Y5

2 (20 Points) The market demand curve for smoothies is given by q = 100 - - P, and the total cost function for any firm in the industry is given by TC(q) = 8q. A. (5 points) Suppose the smoothie industry was perfectly competitive. What would be the equilibrium output and price? B. (5 points) Suppose only two firms compete in this market on quantity (i.e., Cournot firms). Find and graph each firm's reaction. Further, find the equilibrium price, quantity, and profits for each firm. C. (5 points) Suppose the two firms from part B decide to collude. What would be the equilibrium price, quantity, and profits for each firm? D. (5 points) Suppose Firm 1 produces first, followed by Firm 2's response to Firm 1's production. Find the equilibrium price, quantity, and profits for each firm