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The cartel’s profit maximization problem for two firms is given by maxQ (a-bQ)Q-cQ (I) Obtain total quantity, price and profit of each firm Now, let’s assume firms 1 cheats but firm 2 does nothing (II) Obtain total quantity, price and profit of each firm Now, let’s assume firms 1 cheats but firm 2 does cheat as well (IIi) Obtain total quantity, price and profit of each firm
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