Monopolisation Practices Problem [Deep-Pocket Predation] Consider a market with an incumbent firm I and a new entrant E producing a homogenous product. Both firms have the same production technology with variable cost C(q) = 10q and no fixed cost. The inverse market demand is given by P(q) = 130 - q The firms compete in quantities over two periods. Future payoffs have a weight of 82 0. The only difference between the two firms is that the entrant is credit constrained and has to repay an amount of D = 400 at the end of period 1. If the entrant is not able to cover this amount with his first period market profits, it has to leave the marketplace. In this case, no further entry occurs and I is monopolist. a) Suppose the entrant has left the market at the end of period 1. What is the monopoly quantity and profit for the incumbent? b) Suppose the entrant has not left at the end of period 1 and the firms are competing in quantities. What is the Nash equilibrium in quantities and what are the firms' profits in this duopoly? c) Calculate the critical threshold of firm I's production level ql such that the entrant is not making sufficient profits in period 1 to meet this debt repayment