6. Breakdown of a cartel agreement

Consider a town in which only two residents, Tim and Alyssa, own wells that produce water safe for drinking. Tim and Alyssa can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water.

Price Quantity Demanded Total Revenue (Dollars per gallon) (Gallons of water) ( Dollars) 3.60 0 3.30 35 116 3.00 70 210 2.70 105 284 2.40 140 336 2.10 175 368 1.80 210 378 1.50 245 368 1.20 280 336 0.90 315 284 0.60 350 210 0.30 385 116 0 420 0