Hi there, I need to revise for my upcoming examinations but the teacher has failed to put up solutions for the following two questions. I would be grateful for any help on this. many thanks. <b>Question 1</b> Consider the cost functions faced by a duopoly comprising two firms: A and B: CA = 12 + qA, where CA denotes cost in dollars and qA is the quantity in kilograms Firm B: CB = 12 + qB , where CB denotes cost in dollars and qB is the quantity in kilograms The demand function is given by P = 100 ââ¬â Q, where Q = industry output = qA + qB REQUIRED: a) Calculate the profit maximising level of output qA and qB for firms A and B, respectively. b) Calculate the price P at the above level of output. c) Calculate the profits made by each of the firms, Firm A and Firm B d) If Firm A holds output at qA = 23, and Firm B also keeps output at qB = 23, Calculate the profits made by each of the firms, Firm A and Firm B e) Point out the salient aspects of a comparison between output and profit levels in (c) and (d) above. f) Is the output level qA = qB = 23 a Nash equilibrium? <b>Question 2</b> Consider the following payoff matrix between two bakeries: Please click here to see the table: http://img849.imageshack.us/img849/659/shanti.png Choose the best answer from the list below, and give reasons for your choice: a) The Nash equilibrium is not a pareto optimum b) The Nash equilibrium is a pareto optimum c) Airline Aââ¬â¢s dominant strategy is to cut price d) Airline B has no dominant strategy. Once again, many thanks in advance for anyone who can help.