4. In France, the market for bottled water is controlled by two large firms, Perrier and Evian. Each firm has a fixed cost of 1 million and a constant marginal cost of 2 per liter of bottled wate (1=1 euro). The following table gives the market demand schedule for bottled water in France. Price of Bottled Water Quantity of bottled water demanded (5 per liter) (millions of liters) 10 0 9 1 8 2 7 3 6 4 5 5 4 6 3 7 2 8 1 9 a.1. Suppose the two firms form a cartel and act as a monopolist. What will the optimal quantity that the cartel should sell as a monopolist to maximize profits? (Ignore the million. For example, if the answer is 9 million, write 9 as your answer.) QUESTION 13 4 a.2. Suppose the two firms form a cartel and act as a monopolist. What will the monopoly price that the cartel should charge to maximize profits? (Ignore the million and euro sign. For example, if your answer is 9 million euros, input 9 as your answer) QUESTION 14 4 a.3. Suppose the two firms form a cartel and act as a monopolist. Assuming the firms divide the output evenly, how many millions of bottles will each of them produce? (Ignore the million. For example, if the answer is 9 million, write 9 as your answer.) QUESTION 15 4 a.4. Suppose the two firms form a cartel and act as a monopolist. Assuming the firms divide the output evenly, what will each firm's profit be? (Ignore the million and euro sign. For example if your answer is 9 million euros, input 9 as your answer) QUESTION 16 4 b. 1. Now suppose Perrier decides to increase production by 1 million liters. Assume Evian doesn't change its production. What will be the new market output? (Ignore the million. For example, if the answer is 9 million, write 9 as your answer.) QUESTION 17 4 b.2. Now suppose Perrier decides to increase production by 1 million liters. Assume Evian doesn't change its production. What will be the new market price? (Ignore the million and euro sign. For example, if your answer is 9 million euros, input 9 as your answer) QUESTION 18 4 b.3. Now suppose Perrier decides to increase production by 1 million liters. Assume Evian doesn't change its production. What is Perrier's profit? (Ignore the million and euro sign. For example, if your answer is 9 million euros, input 9 as your answer) QUESTION 19 4 b.4. Now suppose Perrier decides to increase production by 1 million liters. Assume Evian doesn't change its production. What is Evian's profit? (Ignore the million and euro sign. For example, if your answer is 9 million euros, input 9 as your answer) QUESTION 20 4 c. 1. What if Perrier increases production by 3 million liters? Assume Evian doesn't change its production. What would Perrier's output? (Ignore the million. For example, if the answer is 9 million, write 9 as your answer.)QUESTION 21 4 .2. What if Perrier increases production by 3 million liters? Assume Evian doesn't change its production. What would the total market output? (Ignore the million. For example, if the answer is 9 million, write 9 as your answer.) QUESTION 22 4 .3. What if Perrier increases production by 3 million liters? Assume Evian doesn't change its production. What would be Perrier's profit? (Ignore the million and euro sign. For example, if your answer is 9 million euros, input 8 as your answer) QUESTION 23 4 d. What do your results tell you about the likelihood of cheating on such agreements? (O The likelihood of cheating is very high O Cannot say much about the likelihood of cheating O There is incentive for only one firm to cheat (O There seems to be no incentive to cheat