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D Question 6 4 pts In a market that operates under quantity competition there are 2 firms (Cournot duopoly). The inverse demand function is P = A - B Q. The cost structure of firm 1 is given by C1(q1) = F1 + c1 91 and that of firm 2 is given by C2(92) = F2 + C2 92. Prior to competing, the two firms can engage in reseOch at levels (X1, X2) respectively in order to lower their marginal costs. As a result, marginal costs are c1 = c - X1 - $2 X2 and C2 = C- X2 - B1X1, where B1 = B2 > 1/2. Finally, the research costs are F1 = a1 (x1)2 /2 and F2 = a2 (X2)2/2, where a, > 0 and a2> 0. 1. The Nash Equilibrium research levels are [ Select ] 2. An increase in the value of a2 would [ Select ]