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(c) On the same graph, plot the best-response functions for firms 1 and 2. Draw your own graph and clearly label your graph. (d) Find the Cournot equilibrium, {of , q2, pc}.Cournot with a tax Two rms produce a homogeneous good. Total production is Q = q1 +112 where, for j = 1, 2, q, is the production of rm j. The inverse demand function is dened by P z 31 Qd. Firm 1's total cost of production is T01 (:11) : q1 + (If and rm 2's total cost of production is T02 ((12) : q2 + (1%. Moreover, rm 2 pays a perunit sales tax of 15 dollars for each unit sold. NOTE THAT THE GOVERNMENT TAXES ONLY FIRM 2! (a) Set up each rm's maximization problem. (b) Find the best-response functions for rms 1 and 2