To keep it simple on the supply side, we will assume that fixed costs are zero so marginal cost equals average costs. We will compare the competitive outcome to what you would get if the firms all agreed to act as if they were a monopoly. Price 85 65 60 55 50 45 30 MC = AC MR 80 100 120 140 160 180 Quantity a. (5 points) Find the competitive market's price and quantity. P = Q =P : Q = b. (5 points) Find the monopoly's price and quantity. P = Q = c. (15 points) Assume that there are two sellers, A and B, in the market. They agreed to form a cartel and act like a monopoly. They have been sharing the market evenly. One day, seller B broke from the cartel and produced an extra 20 units while seller A continued to produce as promised. What would happen to the market price and quantity? How much profit each seller would make? Market Price = Seller A's quantity = Seller B's quantity = Seller A's profit = Seller B's profit =