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please solve this problem ASAP 4. Two gasoline stations are situated across...

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Accounting

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4. Two gasoline stations are situated across the street from each other and are in fierce competition. They face market demand of p=100.05Q, where Q=q1+q2 denotes aggregate output, and each has total cost TC(qi)=10+0.5qi, where i{1,2} denotes the firm. (a) If firms compete in quantities, find each firm's best response function. (b) Find equilibrium output for each firm, price, and profits. (c) If firms collude, what equilibrium price and quantity will each firm offer? What will their profits be? (d) If the firms play an infinitely repeated game, and they seek to coordinate their production decision through the Grim-Trigger Strategy considered in Example 14.5. What discount factor supports continued collusion

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