Consider the following Cournot oligopoly:
- There are two identical firms in the industry, which set their quantities produced simultaneously.
- The two firms face a market demand curve, Q = 120 - P, in which Q = q1 + q2.
- Each firm's cost function is ci(qi) = qi2.
- Each firm acts to maximize its own profit.
- Write down each firm's profit function.
- From the profit functions, derive a best response rule for each player.
- From the best response rules, find the Nash Equilibrium in this market.