Industry demand is given by:
P=150 – 3Q
Cost curve for individual firm is given by: TC=5qi+2qi2
Assume there are 2 firms in the industry A and B. Costs are the same for both firms.
Find price, output and profit given that it is a centralized cartel.
Find prices and output for an individual firm and profit given that it is a decentralized cartel.
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