Question: Please explain how to solve part 3 and part 4 Thank you Two firms - firm 1 and firm 2 - share a market for

Please explain how to solve part 3 and part 4 Thank you

Two firms - firm 1 and firm 2 - share a market for a specific product. Both have zero marginal cost. They compete in the manner of Bertrand and the market demand for the product is given by: q = 20 - min {p1, p2}. 3. Let both players adopt the following strategy: start with collusion; maintain the collusive price as long as no one has ever deviated before; otherwise set the Bertrand price. What is the minimum value of 6 for which this is a SPNE. 4. Suppose the policy maker has imposed a price floor p = 4, that is, neither firm is allowed to set a price below $4. How does your answer to part 3 change? Is it now larger or smaller? Explain

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