Madison shoes manufactures athletic shoes and sports apparel. the following activities occurred during a recent year. the amounts are presented in millions of dollars. a. purchased $228 in equipment; paid by signing a $4 long-term note and fulfilling the rest with cash. b. issued $25 in additional common stock for cash contributions made by stockholders. c. several madison shoes investors sold their own stock to other investors on the stock exchange for $170 per share of stock. required: 1. for each of the events above, prepare journal entries. (if no entry is required for a transaction/event, select "no journal entry required" in the first account field. enter your answers in millions (i. e., 10,000,000 should be entered as

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?