Consider two firms facing the demand curve P=9050 where Q=Q1+Q2. The firms' cost functions are C1(Q1)=10+15Q1 and C2(Q2)=15+30Q2 Suppose that both firms have entered the industry. What is the foint profe-mawimizing level of output? How much will each firm produce? Combined, the firms will preduce 7.5 untis of oulput, of wtich Firm 1 will produce 7.5 units and Firm 2 will produce 0 units. (Enter a numeric respense using a real number rounded to two decimal places.) How would your answer change if the firms have not yet entered the indusiry? If the firms have net yet entered the industry, then A. Firm 1 wil enter and produce 7.50 units and Firm 2 will not enter. 11. neither firm will enter. C. Firm 1 will not enter and Firm 2 will enter and produce 7.50 units. 0. Firm 1 will enter and produce 7.50 units and Firm 2 will enter and produce 0.00 units. I. both firms will enter and each will produce 7.50 units. What is each firm's equilbrium output and proft if they behave noncooperatively? Use the Cournot model. If the firms compete, then Firm 1 wil produce 6.00 ' units of output and Firm 2 will produce 3.00 units of output. Draw the firms' reaction curves and show the equilibrium. 1.) Using the line drawing tool, draw Firm 1's reaction curve and label it RC1. 2.) Using the line drawing tool, draw Firm 2's reaction curve and label it RC2. 3.) Using the point drawing tool, indicate the Cournot Equilibrium and label it Equilibrium. Carefully follow the instructions above, and only draw the required objects. How much should Firm 1 be willing to pay to purchase Firm 2 if collusion is illegal but a takeover is not? Firm 1 would be willing to pay $ to purchase Firm 2 (so that Firm 2 does not to produce)..

1. Consider two firms facing the demand curve P=9050 where Q=Q1+Q2. The firms' cost
functions are C1(Q1)=10+15Q1 and C2(Q2)=15+30Q2 Suppose that both firms have entered the
industry. What is the foint profe-mawimizing level of output? How much will each firm
produce? Combined, the firms will preduce 7.5 untis of oulput, of wtich Firm 1 will produce 7.5
units and Firm 2 will produce 0 units. (Enter a numeric respense using a real number rounded to
two decimal places.) How would your answer change if the firms have not yet entered the
indusiry? If the firms have net yet entered the industry, then A. Firm 1 wil enter and produce
7.50 units and Firm 2 will not enter. 11. neither firm will enter. C. Firm 1 will not enter and Firm
2 will enter and produce 7.50 units. 0. Firm 1 will enter and produce 7.50 units and Firm 2 will
enter and produce 0.00 units. I. both firms will enter and each will produce 7.50 units. What is
each firm's equilbrium output and proft if they behave noncooperatively? Use the Cournot
model. If the firms compete, then Firm 1 wil produce 6.00 ' units of output and Firm 2 will
produce 3.00 units of output.
Draw the firms' reaction curves and show the equilibrium. 1.) Using the line drawing tool, draw
Firm 1's reaction curve and label it RC1. 2.) Using the line drawing tool, draw Firm 2's reaction
curve and label it RC2. 3.) Using the point drawing tool, indicate the Cournot Equilibrium and
label it Equilibrium. Carefully follow the instructions above, and only draw the required objects.
How much should Firm 1 be willing to pay to purchase Firm 2 if collusion is illegal but a
takeover is not? Firm 1 would be willing to pay $ to purchase Firm 2 (so that Firm 2 does not to
produce).