Suppose two firms compete in quantities (Cournot) in a market in which demand is described by: P=260-2Q. each firm incurs no fixed cost but has a marginal cost of 20.

Now imagine they collude to produce the monopoly output.

Suppose that after the cartel is established, firm 1 decides to cheat on the collusion, assuming the other firm will continue to produce its half of the monopoly output.

Now how much will firm 1 produce?

a. 35 b.45 c.60 d.50