(Solved): Q1 (8 points) Consider a Stackelberg game with uncertainty. Two firms compete in quantities. Firm ...

Q1 (8 points) Consider a Stackelberg game with uncertainty. Two firms compete in quantities. Firm 1 chooses q? first; firm 2 chooses q2 after observing the value of q?. The market price is given by P(91, 92) = 300-91-92. Firm 1's total cost function is C? (9?) = q and this is publicly known to both firms. Firm 2's total cost function is C? (92) = 1092 with probability 0.1, C? (92) = 792 with probability 0.5, C? (92) = 2q2 with probability 0.4. Firm 2 knows its actual total cost function but firm 1 doesn't. Find the perfect Bayesian equilibrium of this game. Please show your steps and clearly state the full equilibrium strategy for each firm.