When trekking in Nepal you need a local guide to b allowed to go trekking for several days. These guides have formed a cartel, which determines the price per hour.
The demand for trained guides as follows:
P = 120 - 0.5 Q
The costs for the Nepalese guides are:
Fixed costs: 0
Variable costs: 1/8Q (Q + 320)
Calculate and show the price-quantity combination graphically optimising the joint profit for thr guides.
Calculate the social loss of welfare.