Suppose That Market Demand Can Be Represented as P =

question 39

Essay

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?

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Definitions:

Gratuitous Bailment

A bailment for the sole benefit of either the bailor or the bailee, in which the other party receives no consideration for benefits bestowed.

Liable

Legally responsible.

Damages

Money recovered by a party in a court action to compensate that party for injury or loss.

Ancestors

Immediate family members from previous generations, such as parents, grandparents, and great-grandparents.