Question

If aquataste sticks to the agreement, waterland has an incentive to renege on the agreement by producing 350 gallons because waterland's profits would then increase from $375 to

Answer 1

Assume that Waterland and Aquataste make a nonbinding, informal agreement that each will produce 250  
$0.00
 0
 $2.75
 $250.00
 100
 $2.50
 $450.00
 200
 $2.25
 $600.00
 300
 $2.00