Duopoly GamesA market has the demand curve P=121-3Q. Both firm 1 and firm 2 have a per-unitcost of $

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Duopoly GamesA market has the demand curve P=121-3Q. Both firm 1 and firm 2 have a per-unitcost of $4.Assume the firms compete against each other by setting quantities.What output will they produce (i.e., what is the Cournot-Nashequilibrium)?1.a)You could solve this in one of two ways. You could use calculus to find theCournot-Nash equilibrium. Alternatively, you could fill in the payoffmatrix, then use the iterated deletion of dominated strategies to find the onlytrembling hand perfect Nash equilibrium.11Firm1’soutput13Firm 2’s output1517191113151719Assume the firms compete against each other by setting prices, andthat whoever has the lowest price will get to sell to the entire market,while the firm with the higher price will have zero demand for it’sproducts. If the firms price their products identically they will split themarket demand. What is the Bertrand equilibrium in this market?1.b)

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