Suppose instead that the firms in Problem 9 compete by setting quantities rather than prices. All other facts are the same.

Suppose instead that the firms in Problem 9 compete by setting quantities rather than prices. All other facts are the same. It is possible to rewrite the original demand equations as P1 = [150 - (2/3) Q2] - (4/3) Q1 and P2 - [150 - (2/3)Q1] - (4/3)Q2. In words, increases in the competitor’s output lowers the intercept of the firm’s demand curve. a.