Question: please help me to solve this two question. Problem 3: Cournot Competition and Price-cost Margin. The demand for a product is Q = a -

please help me to solve this two question.

please help me to solve this two question. Problem 3: Cournot Competition

Problem 3: Cournot Competition and Price-cost Margin. The demand for a product is Q = a - P/2. If there are 4 firms in an industry and marginal cost is MC = 20, then the price in Nash equilibrium is P = 56. What is a? Hint. Use the formula discussed in class, P - MC P nu where n is the number of firms, and / is the absolute value of the elasticity of demand. Problem 4: Stackelberg Bertrand Game. Two firms are producing identical products, and the marginal cost is fixed at MC = 20. The firms choose prices sequentially. Firm 1, the "leader", moves first and chooses price p1. Firm 2, the "follower", observes p, and chooses price p2. There are 100 consumers. All of them will buy from the firm with lower price. If the prices are equal, 50 consumers buy from firm 1, and 50 consumers from firm 2. Assume that the prices are integers (that is, the price should be a whole number like 24 or 49 and can not be 49.99 or 67.5.) (a) If p1 = 50, what is follower's best reply? (b) Specify follower's best reply for any value of p1- (c) Given the follower's best reply, what price should the leader set to maximize its payoff

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