Question: Explain clearly type the answer Question 2 (30 pts): Juicy Couture (Firm 1) and House of Revlon (Firm 2) are producing ballroom shoes. Assume that

Explain clearly type the answer

Question 2 (30 pts): Juicy Couture (Firm 1) and House of Revlon (Firm 2) are producing ballroom shoes. Assume that the ballroom shoes they are selling are homogenous in nature. The two firms face the market demand curve p = 400 - 30, where Q = q1 + 92. Juicy Couture's total cost function is C1 = 2q7 and House of Revlon's cost function is C2 = q2. Suppose that both firms act independently and choose simultaneously, just like a Cournot model. a. (10 pts) Determine the output reaction function of each firm b. (7 pts) Solve for the Cournot equilibrium of each firm and the market price of the Cournot Equilibrium c. (3 pts) Find the total profit of each firm under the Cournot Equilibrium d. (5 pts) Calculate the total producer surplus at the Cournot Equilibrium e. (3 pts) Calculate the total consumer surplus at the Cournot Equilibrium f. (2 pts) Calculate the total welfare of the society at the Cournot Equilibrium

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