D, E and F please thank you All question are with regards to the following set up. There are two firms A and B. Firmscompete in a Cournot Duopoly in Karhide. They set quantities A and q. Inverse demand isP(9A + 9B) = 18 - 9A-9B and costs are C(q) = 3 * q for both firms. Firm B is a domestic firm(in Karhide,) and firm A is a foreign firm (from Orgoreyn.) The government of Karhide engagesin a strategic trade intervention by giving firm B a per unit subsidy of s. (That is, when firm Bproduces and sells qв units, firm B receives a payment of s* qg from the government.)You must show your work at each step, unless the questions is followed by "No work required." (3)Assume that s = 3.(a) Find firm B's profit function under the subsidy. (No work required.)(b) Find firm B's best response function. (You may do this directly or by setting s to zero in yourexpressions from (1b).(c) Why don't I need to ask you to solve for A's best response?(d) Solve for the equilibrium outputs (9₁, 96).(e) Solve for the equilibrium price.(f) Solve for firm B profits.

Answered: Image /qna-images/answer/ec75ffdb-e8f8-475e-a3d0-21fe348ddfd2.jpg

Answered: (d) Solve for the equilibrium outputs…

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(d) Solve for the equilibrium outputs (996). (e) Solve for the equilibrium price. (f) Solve for firm B profits.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 2E

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Question

D, E and F please thank you

(3)
Assume that s = 3.
(a) Find firm B's profit function under the subsidy. (No work required.)
(b) Find firm B's best response function. (You may do this directly or by setting s to zero in your
expressions from (1b).
(c) Why don't I need to ask you to solve for A's best response?
(d) Solve for the equilibrium outputs (9₁, 96).
(e) Solve for the equilibrium price.
(f) Solve for firm B profits.

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