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2. (30 points) In the industry for vanilla, the inverse demand curve is P = 20-Q. There are three firms with MC = 2. If
2. (30 points) In the industry for vanilla, the inverse demand curve is P = 20-Q. There are three firms with MC = 2. If all three firms collude, answer the following questions. (a) Find the market price and quantity of the cartel. (b) Plot the relevant curves and clearly label and show the intercepts and the cartel's price and quantity with numbers. Q (c) Find each firm's profit (Hint: they split equally and you will use this number again later)
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