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Consider a market with demand p = a − bq. There are two firms. Both firms...

  1. Consider a market with demand p = a − bq. There are two firms. Both firms produce the same homogeneous product but have different technologies. Firm A has a cost function cA(qA) = cA × qA and firm B has a cost function cB(qB) = cB × qB. If necessary, assume that cA < cB.

    1. (a) Find the equilibrium quantities produced by each firm, the total equilibrium quantity, and the equilibrium price as a function of a, b, cA, and cB.

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