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Suppose that market demand can be represented as p = 100 - 2Q.There are 10 identical firms producing an undifferentiated product,each with the total cost function TC = 50 + q2.Compare the competitive outcome with the cartel outcome.What is the individual firm's incentive to cheat on the cartel?
Profit Equation
The formula that calculates profit by subtracting total expenses from total revenue.
Total Revenue
The overall income generated by a business from all its sales activities before any costs or expenses are deducted.
Total Cost
The complete cost of production, including both fixed and variable costs, or the entire expense incurred in a transaction.
Price-Setting Process
The approach or methodology used by businesses to determine the selling price of their products or services.
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