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AfterJames implemen's his new plan, the price of water V to per gallon. Given Amber and James's production levels, James's prot becomes and Amber's profit becomes . Because James has deviated from the cartel agreement and increased his output of water to 45 gallons more than the cartel amount, Amber decides that she will also increase her production to 45 gallons more than the cartel amount. After Amber increases her production, James's prot becomes , Amber's prot becomes , and total prot (the sum of the prots of James and Amber) is now . True or False: Based on the fact that both James and Amber increased production from the initial cartel quantity, you know that the output effect I.vas smaller than the price effect at that quantity. {:3 True C} False James and Amber have each cheated on their cartel agreement and increased production by 45 gallons more than the cartel amount. However, they both realize that if they continue to increase output beyond this amount, they'll each suffer a decrease in prot. [To see this for yourself, consider James's prot when he produces 90 gallons more than the cartel amount compared to his profit when he produces 45 gallons more than the cartel amount.) Neither James nor Amber has an incentive to increase output further, nor does either have an incentive to decrease output. This outcome is an example of v