Suppose now that one of the firms in the previous question decides to break the cartel agreement and makes a decision to sell 10 additional units.
(a) How many units does he intend to sell?
(b) If the other supplier maintains her output at the cartel level, at what price will the new total output be sold?
(c) What profit will each make in this new situation?
(d) Is the combined profit here greater or less than in the cartel situation?
(e) How is the firm that previously maintained the cartel output level likely to react here?