Question: Please answer the questions with the steps! Especially for the question 5 please! Thank you! QUESTION 4 Consider the following duolopy market, The firms produce

Please answer the questions with the steps! Especially for the question 5 please! Thank you!

QUESTION 4 Consider the following duolopy market, The firms produce differentiated goods. The demand for good i is q; = 10 -P; + pj . Firms do not face any fixed costs. For firm 1, per unit cost of production is 4, for firm 2 per unit cost of production is 2. The best response functions are: P1= 14 + P2 14 - P1 2 -,P2= 2 14 + P2 12 + P1 P1= 2 ,P2 2 12 + P2 2, p2= 12 + P1 P1= 2 2 O P1= 12 + P2 p, = 14 + P22 2 QUESTION 5 Consider the following duolopy market, The firms produce differentiated goods. The demand for good / is q; = 10 -4p; + p; . Firms do not face any fixed costs. For firm 1, per unit cost of production is 4, for firm 2 per unit cost of production is 2. In the Nash Equilibrium, Firm 1 and firm 2 set the price equal to 38/3 Firm 1 and firm 1 set the price equal to 40/3 Firm 1 sets the price equal to 40/3 The quantity produced by firm 2 is 38/3

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