Question: Tutorial 3 - Week 5 1. Consider a duopoly with the same assumptions of the Cournot model, except for the fact that the marginal costs

Tutorial 3 - Week 5 1. Consider a duopoly with the same assumptions of the Cournot model, except for the fact that the marginal costs of the two firms are not the same. In particular, firm 1's marginal cost is c1, while firm 2's marginal cost is c2, with C2> C1. 1.1. State firm 1's best response function. 1.2. State firm 2's best response function. 1.3. Find the quantities q1 and q2 played in the Nash equilibrium. 1.4. Which firm produces more? Hint: You don't need to take derivatives. Just look at the standard model's best response functions and make the appropriate changes

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