# The table shows the demand curve for monster trucks. There are two monster truck producers. For simplicity, assume that the

The table shows the demand curve for monster trucks. There are two monster truck producers. For simplicity, assume that the cost of producing a monster truck is zero. ( AC=0
, FC=0) Q demanded Price
1
\$18
2
\$16
3
\$14
4
\$12
5
\$10
6
\$9
7
\$7
8
\$6
9
\$5

Assume the two producers initially collude to maximize profits, splitting production and profits evenly.
What price will they charge?
\$
What is the total quantity produced?
monster trucks
What are the profits for each firm?
\$
If one of the producers produces an extra unit to get higher profits, what is the new market price?
\$
What are the profits for this firm when it breaks the agreement?
\$
What are the other firm’s profits after the agreement is broken?
\$

What price will they charge:
\$9

What is the total quantity produced?
\$6

What are the profits for each firm?
\$27

If one of the producers produces an extra unit to get higher profits, what is the new market price?
\$7

What are the profits for this firm when it breaks the agreement?
\$28

What are the other firm’s profits after the agreement is broken?
\$21