There are two gravel suppliers in the Davis area, Davis Lumber (D) and Hibbert (H). They are engaged in Cournot competition, and face the same inverse demand curve for gravel, given by P = 60 - 5Q, where the P is in dollars per cubic yard and Q is hundreds of yards sold per month. D has marginal cost MC = $10 per yard, while H has MC = $20 per yard.
1. Calculate the two rivals' reaction functions?
2. Graph the two reaction functions, and identify the Cournot equilibrium market price as well as the quantities supplied by each firm.