Question: solve i n detail and explain fully Question 6 : Consider a homogenous product duopoly i n which the two firms, 1 and 2 ,

solve in detail and explain fully
Question 6:
Consider a homogenous product duopoly in which the two firms, 1 and 2, compete by choosing
their respective quantities, Q1 and Q2. Market demand is given byP=100-Q, where Pis the
market price per unit and Q=Q1+Q2. Firm 2's total costs are given byTC2=200+Q2,
while firm l's total costs are TC1=100+2Q1.
(a)To which firm would the ability to move first be most valuable?
(b)Is there an incentive for the two firms to merge to form a monopoly? Explain fully.
(c) Would a government wish to set policy to block such a merger? Explain fully.
solve i n detail and explain fully Question 6 :

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