1. Two paper manufacturers near the same river decide simultaneously and independently how much waste water to dump in the river a day. They use similar production technologies and face the same regulatory environment, and their prots are calculated by the following formula (given in thousand dollars per day): 1r,;(m,:,mj) = 10 + 4.8m, + 0433,3334 m3 23:33, for 2', j = 1, 2, Where i and j denote the two different manufacturers and :9, (z' = 1,2) are their respective pollution levels, measured in thousand liters of waste water. a. Assuming that the objective of both manufacturers is to maximize prots, nd the best response functions. (10 pts) b. Calculate the Nash equilibrium pollution levels. (10 pts) c. Do the manufacturers benet from polluting (as in the Nash equilibrium) or would they be better off if they didn't pollute at all? (5 pts)