a. Compute the subgame perfect equilibrium of this market game. Do so by first finding the equilibrium quantities and profits in the Cournot subgames. Show your answer by designating optimal actions on the tree and writing the complete subgame perfect equilibrium strategy profile. [Hint: In an n-firm Cournot oligopoly with demand p=12-Q and 0 costs, the Nash equilibrium entails each firm producing the quantity q=12/(n+1)]
b. In the subgame perfect equilibrium, which firms (if any) enter the industry?
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