Question 3 One strategy that firms often strive for is what is called "product differentiation", where a firm, either through advertising or other means, sufficiently differentiates its product from the competition. To this end, consider a Cournot oligopoly with non-homogenous products (both goods may have different prices), where the demand curves are given by P1 = 100 - Q1 - BQ2 P2 = 100 - BQ1 - Q2 where 3 is some parameter which determines how much impact a competitor's output has on one's own demand curve, that is, how "differentiated" products are. A very low 3 represents very differentiated products, which a very high B represents very similar products. Suppose that costs are given by TC(Q1) = Q, and TC(Q2) = Q? for firm 1 and firm 2, respectively. We can then write marginal revenues and marginal costs as the following: MR = 100 - 201 - BQ, ; MC1 = 201