Demand for a product is D(p) = 5 – p, two firms are the potential producers of the product, for the consumer products from each firm are exactly the same. Assume firm 1 has a marginal cost of c₁ 1 and firm 2 has a marginal 1.5. Assume that the lowest unit of prices is 1 cent (0.01). Both firms choose prices simultaneously. a) Write the profit of each firm as a function of prices P₁, P2 cost of c₂ b) What is the optimal pricing strategy for each firm? c) What are the equilibrium prices? d) What is the consumer surplus? e) What is the producer surplus? f) True or false. Firms competing in prices for an homogeneous good make zero profits in equilibrium. =