Question: QUESTION 2 10 points Save Answer A local government plans to auction off a franchise to supply service to the town. The (inverse) demand curve

QUESTION 2 10 points Save Answer A local government plans to

QUESTION 2 10 points Save Answer A local government plans to auction off a franchise to supply service to the town. The (inverse) demand curve for the service is P(Q)=1010-@, where P denotes price, and @ denotes quantity. Only two firms, firm 1 and firm 2, are qualified to compete for the franchise. Firm I's cost func- tion is Ci(Q) -100; firm 2's cost function is C(@) -200. The franchise is auctioned off using a modified English auction, where the firm that promises to supply the service at the lowest price wins the franchise. Which firm will win the franchise? What will the winning bid be

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