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2. According to the Competitive and Consumer Act in Australia, cartel is ILLEGAL. A cartel is a collection of firms producing the same (or very
2. According to the Competitive and Consumer Act in Australia, cartel is ILLEGAL. A cartel is a collection of firms producing the same (or very similar) product that makes an agreement to fix prices or split the market (among other things). In this question, we try to understand why. Assume that the market is currently supplied by ten identical sellers each with variable cost VC(q) = 3q + =q-, and the market demand is D = 10(7 - p). Assume that the market demand is sufficiently high that no seller shuts down.
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