Question: Question 2 (30 points; 10 points each): Consider two imperfectly competitive firms, BOSE and JABRA, selling a differentiated product, headphones, to loyal consumers, such that

Question 2 (30 points; 10 points each): Consider two imperfectly competitive firms, BOSE and JABRA, selling a differentiated product, headphones, to loyal consumers, such that each firm faces a different demand and has a different marginal cost of production: Firm 1: Qe = 50 -0.20P and MCB = 60 Firm 2: Q, = 60 - 0.33P and MC= 302 1. Find the profit-maximizing prices and quantities for each firm. 2. Demonstrate via the inverse elasticity rule which of those firms has a higher monopoly power 3. Draw these two situations, clearly showing the mark-up for each of those two firms

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