Suppose Jerry sells gasoline, which have the following demand: p,= 170 – 397-98 where ph is the price of Jerry's gasoline and qu is the number of gasoline Jerry sells. 9E is the number of gasoline James's rival, Ethan, sells. Ethan's demand is given by: PE = 170 – 398-9) where pe is the price Ethan can sell his gasoline for. Suppose each seller has a cost per unit (average and marginal) of $20. (18 points) a. How does this game differ from the Cournot model with identical products? How do the demand curves demonstrate that the goods are differentiated – not perfect substitutes for one another? (3pt) b. Derive the best response functions for Jerry and Ethan and compute the Nash Equilibrium outputs and prices for Jerry and Ethan. (6pt) c. Suppose the two firms merge. By doing so, the newly merged firm will maximize the joint profits ((94,9B) = A(94,9B) + B(94,93)). Find the joint-profit maximizing quantities and price. (4pt) d. Are the combined profits greater or smaller from merging? (compare total profits before and after merging) (3pt) e. Are consumers better or worse off with the firms merging? (2pt) (briefly explain)