Consider a market composed of five identical firms each with aconstant marginal cost of production of $50. They face a marketdemand given by Q=2,500-10P. Each firm is currently charging thecompetitive price.
(a) The profits of each firm in this situation are $________.
(b) These firms are thinking of forming a cartel. They need a poolof funds to maintain this cartel. They have agreed to share thecartel profits equally. The maximum amount that each firm will bewilling to contribute to the pool is $_______.