Solve clearly..

(E) p = 1,q = 1 and p = 0,q = 0. Question 5 Consider two firms, 1 and 2, producing non negative quantities q and q2 respec- fively, facing the inverse demand function p - 4 - Q, where Q = qi + q. Firm 1 has constant marginal costs ci - 3. If firm 2 produces or - 2 then firm I would marimize profit by producing TT. ( 4 -91- 92 ) 21 - 37' an = 4- 291- 92 - 3:0 9. = = (1 - 12 ) Question 6 Consider the two-player, normal form game displayed below, where player 1 moves first followed by player 2. The Subgame Perfect Nash equilibrium payoff(s) for this game is (are) Player 2 L M R Player 1 U 5, 1 3, 2 345 M 3.4 416 2, 1 D 215 1 3 0.2 (A) (3.5) 2 11 3