Consider a duopoly where firms compete for market share by setting prices. The firms produce differentiated products and face the following demand functions where q is output and P is the price in dollars.               q1 = 100 – 2P1 + 2P2         Demand Function for Firm 1               q2 = 120 – 4P2 + P1          Demand Function for Firm 2   Suppose that firm 1 is able to produce output at a constant marginal cost of $30 and that firm 2 is able to produce output at a constant marginal cost of $20. Both firms operate with no fixed costs. 1) Derive the best response function for firm 1             2) Derive the best response function for firm 2

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