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Consider a market composed of four firms, each with a constant marginal cost of production of Rs. 20, and facing a total market demand curve
Consider a market composed of four firms, each with a constant marginal cost of production of Rs. 20, and facing a total market demand curve given by P = 40- 0.01 Q. Each firm is currently charging the competitive price. The four firms are thinking of forming a cartel, but they realize that they will each have to contribute funds to keep the cartel intact. How much would each potential cartel member be willing to pay to help enforce the cartel agreement?
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