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Question 4 5 pts In a given market the inverse demand function is P = 170 Q per year. The interest rate is r = 0.05 and the cost structure of a firm is given by C(q) = 80 q. Another alternative is to license the technology to the other rm (for this, assume that the innovator has obtained a patent for it) but stay in the market. Determine which of the following is true: 0 It would charge a fee oft = 45 per unit sold and obtain 6,175 in per year prots. 0 It would charge a fee oft = 15 per unit sold and obtain 3,200 in per year prots. 0 It would charge a fee oft = 30 per unit sold and obtain 6,175 in per year prots. 0 It would charge a fee oft = 30 per unit sold and obtain 3,100 in per year prots. Question 5 5 pts In a given market the inverse demand function is P = 170 Q per year. The interest rate is r = 0.05 and the cost structure of a firm is given by C(q) = 80 q. Now assume that originally there was a Cournot duopoly in the market (with equal costs) and that it would be too costly for the research institute to enter the market. Answer the following: If the research institute sells an exclusive license at a fixed annual fee L to rm 1 (with the threat of going to the other firm if firm 1 rejects the offer), then 0 The optimal annual fee is 2,100 and profits for firm 1 and 2 are 400 and 900 respectively. 0 The optimal annual fee is 1,600 and profits for firm 1 and 2 are 900 and 900 respectively. 0 The optimal annual fee is 2,100 and profits for firm 1 and 2 are 400 and 400 respectively. 0 The optimal annual fee is 1,600 and profits for firm 1 and 2 are 900 and 400 respectively