s has a maximum willingness to pay of $40. Each consumer will buy at most 1 unit, and will buy it whichever firm charges the lowest price. If both firms set the same price, they share the market equally. Costs are given by ci(qi) = 16q;. Because of regulation, firms can only choose prices which are integer numbers, and they cannot price above $40. Answer the following: a) If Firm 1 chooses pi = 36, Firm 2's best response is to set what price?_________ b) If Firm 2 chooses the price determined in the previous question, Firm 1's best response is to choose what price?_________ C) If Firm 1 chooses pi = 11, Firm 2's best response is a range of prices. What is the lowest price in this range?__________ d) Now suppose both firms are capacity-constrained: Firm 1 can produce at most 31 units, and Firm 2 can produce

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