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Assume that the marginal cost of selling the gasoline is zero. Suppose the two gas stations have agreed to maximize industry profit and split the
Assume that the marginal cost of selling the gasoline is zero. Suppose the two gas stations have agreed to maximize industry profit and split the profit evenly. If ABC expands production to 175 gallons while XYZ abides by the agreement: ABC's profit will increase and XYZ's profit will decrease. ABC's profit will decrease and XYZ's profit will increase. both gas stations will experience a decrease in profit. both gas stations will experience an increase in profit
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