Puget sound divers is a company that provides diving services such as underwater ship repairs to clients in the puget sound area. the company’s planning budget for may appears below: puget sound diversplanning budgetfor the month ended may 31budgeted diving-hours (q) 100revenue ($365.00q) $ 36,500expenses: wages and salaries ($8,000 $125.00q) 20,500supplies ($3.00q) 300equipment rental ($1,800 $32.00q) 5,000insurance ($3,400) 3,400miscellaneous ($630 $1.80q) 810total expense 30,010net operating income $ 6,490during may, the company’s actual activity was 105 diving-hours. required: prepare a flexible budget for may. question 1 of 5 total 1 of 5mcgraw hill education

1. consider a two-firm industry. firm 1 (the incumbent) chooses a level of output qı. firm 2 (the potential entrant) observes qı and then chooses its level of output q2. the demand for the product is p 100 q, where q is the total output sold by the two firms which equals qi +q2. assume that the marginal cost of each firm is zero. a) find the subgame perfect equilibrium levels of qi and q2 keeping in mind that firm 1 chooses qi first and firm 2 observes qi and chooses its q2. find the profits of the two firms-n1 and t2- in the subgame perfect equilibrium. how do these numbers differ from the cournot equilibrium? b) for what level of qi would firm 2 be deterred from entering? would a rational firm 1 have an incentive to choose this level of qi? which entry condition does this market have: blockaded, deterred, or accommodated? now suppose that firm 2 has to incur a fixed cost of entry, f> 0. c) for what values of f will entry be blockaded? d) find out the entry deterring level of q, denoted by q1', a expression for firm l's profit, when entry is deterred, as a function of f. for what values of f would firm 1 use an entry deterring strategy?