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Suppose you are a judge hearing an antitrust case, and have concluded that the rms in this case illegally colluded to set the price p1
Suppose you are a judge hearing an antitrust case, and have concluded that the rms in this case illegally colluded to set the price p1 of their output higher than the marketprice p01. You now must determine the ne to impose on these rms. Your goal is to charge a ne equal to the harm caused to consumers by the excessively high price. Would the concepts of compensating variation, equivalent variation, and change in consumer surplus help you x this ne? If you could calculate each of these, which one would you use? Which of these would you most likely be able to calculate, and how would you go about doing so
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