Teams 1 and 2 receive total profits of π1(q1, q2) + w1q1 and π2(q1, q2) + w2q2, respectively. π1 and π2 represent profits from ticket sales, q1 and q2 represent quantities, and w1q1 and w2q2 represent profits from sales of apparel. The demand curve for tickets is P = 240 – Q and both teams have marginal cost equal to zero.
i) Suppose that the teams select q1 and q2 independently. Find the equilibrium quantities and profits from ticket sales when w1 = w2 = 0.
ii) Find the equilibrium quantities and profits from ticket sales when w1 = w2 = 30. Find the total profits.
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