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3. Consider the same demand and cost functions from question 2, focusing on the case where there are two firms in the market. Suppose the

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3. Consider the same demand and cost functions from question 2, focusing on the case where there are two firms in the market. Suppose the two duopolists agree to a cartel in which they each produce half of the monopoly output. Show that this cannot be an equilibrium. [Hint: what is the best response of one firm if the other produces half of the monopoly output?]

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