You compete with Honda by announcing a price. Consumers then choose the car with the lowest price. Suppose both you and the manager of Honda are shortsighted; you both know you will be fired next year anyway, let's say. What price and quantity do you expect to prevail in this market? Why? [10] 2. Suppose Honda and Toyota merged. What price and quantity would you expect in this case? [5] The US government becomes concerned about the extent of Japanese import penetration in the US car market. After some lobbying from Toyota and Honda, the Japanese government offers to implement a Voluntary Export Restriction (VER) policy. Under the terms of the VER, the Japanese government promises to fine Toyota and Honda if either firm's exports to the US exceed a certain amount, which we will refer to as the export quota. 3. Why would you, as a manager of Toyota, lobby for a VER? [10] 4. What export quota and size of fine would you lobby for? [10