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Suppose that demand for soccer balls is given by ?=120 – ?. There are only two...

Suppose that demand for soccer balls is given by ?=120 – ?. There are only two firms that produce soccer balls, they both have cost function ??=60+q?^2, where ?=1,2 denotes the factory. Total production of soccer balls is equal to output from the two firms.

a. Suppose the two firms compete on quantities. Find the Nash equilibrium price and output of each firm. How much profit does each firm make?

b. Suppose that firm 1 gets their product to market faster, so it makes its output decision before firm two. Find the Stackelberg equilibrium price and output of each firm.

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