? E XERCISE 220.1 (Exit from a declining industry) Assume that c = 10, k 1 = 40, k 2 = 2 0 , a n d…

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?   EXERCISE  220.1 (Exit from a declining industry)  Assume that c  =  10, k1   =   40,

k2  = 20, and Pt(Q)= 100 − t − Q for all values of t and Q for which 100 − t − Q >

0, otherwise Pt(Q) = 0. Find the values of t1 and t2 and check whether firm 2’s loss in period t1 when both firms are active is less than the sum of its profits in periods t1 + 1 through t2 when it alone is active.