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Suppose that the market demand is Q=80Pand the marginal cost is $20. Suppose two identical firms are selling the same product in the market. 1.Calculate

Suppose that the market demand is Q=80Pand the marginal cost is $20. Suppose two identical firms are selling the same product in the market.

1.Calculate the market price and the output and profit of each firm if they collude and act as a monopoly.

2.Suppose that now firm 1 decides to break the collusion and cheats. Calculate the market price, and each firms output and profit after cheating.

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