Aume that (1) the 10 identical firm in a purely oligopolitic indutry
form a centralized cartel, (2) the total market demand function facing
the cartel i QD = 240 -10P and P i given in dollar, and (3) each
firm’ SMC i given by $1q for q > 4 unit, and factor price remain
contant. Find (a) the bet level of output and price for thi cartel, (b)
how much each firm hould produce if the cartel want to minimize
cot of production, and (c) how much profit the cartel will make if
the SAC of each firm at it bet level of output i $12. (d) Why do we
tudy cartel model if cartel are illegal in countrie uch a the U. S. ?
