consider the rivalry between Boeing and Airbus $to$ develop a new commercial jet aircraft. Suppose Boeing $is$ ahead $in$ the development process, and Airbus $is$ considering whether $to$ enter the competition. $If$ Airbus stays out, $it$ earns a profit $of$ $$0,$ whereas Boeing enjoys a monopoly and earns a profit $of$ $$1$ billion. $If$ Airbus decides $to$ enter and develop a rival airplane, then Boeing has $to$ decide whether $to$ accommodate Airbus peaceably $orto$ wage a price war. $In$ the event $of$ peaceful competition, each firm will make a profit $of$ $$300$ million. $If$ there $is$ a price war, each will lose $$100$ million because the prices $of$ airplanes will fall $so$ low that neither firm will $be$ able $to$ recoup its development costs. Using the subgame perfect Nash equilibrium concept, what will $be$ the outcome $of$ this game?

Airbus will enter and Boeing will wage a price war.

Airbus will enter and Boeing will accommodate peaceably.

Not enough information.

Airbus will not enter.

Suppose there $is$ a duopoly $in$ which two firms producing two goods that are perfect substitutes face the following demand and costs:

Inverse Demand: $P=200-Q,$ where $Q=q_1+q_2$

Firm $1$ costs: $C_1(q_1)=20q_1,$ implying a constant marginal cost $of$ $$20(M{C}_1=20)$

Firm $2$ costs: $C_2(q_2)=20q_2,$ implying a constant marginal cost $of$ $$20(M{C}_2=20)$

$If$ the two firms engage $in$ Bertrand competition, then the equilibrium price $in$ the market $is$ :

$,$ the market

equilibrium quantity $(Q^{*})is$

and total profit $in$ the market $is$ $