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6. The cartel Consider a town in which only two residents, Musashi and Rina, own wells that produce water safe for drinking. Musashi and Rina

6. The cartel Consider a town in which only two residents, Musashi and Rina, own wells that produce water safe for drinking. Musashi and Rina 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 0 3.30 35 115.50 3.00 70 210.00 2.70 105 283.50 2.40 140 336.00 2.10 175 367.50 1.80 210 378.00 1.50 245 367.50 1.20 280 336.00 0.90 315 283.50 0.60 350 210.00 0.30 385 115.50 0 420 0 Suppose Musashi and Rina form a cartel and behave as a monopolist. The profit-maximizing price isper gallon, and the total output isgallons. As part of their cartel agreement, Musashi an

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