Table: Firms A, B $$\begin{array} { | c | l | c | c }
\hline & & \begin{array} { c }
\text { Firm B (profits } \
\text { millions) }
\end{array} & \
\hline & & \text { Restrict Output } & \text { Expand Output } \
\hline \text { Firm A (profits } & \text { Restrict output } & \$ 15 , \$ 15 & \$ 6 , \$ 25 \
\hline \text { millions) } & \text { Expand output } & \$ 25 , \$ 6 & \$ 12 , \$ 12 \
\hline
\end{array}$$
Refer to the table. What is the equilibrium outcome if Firms A and B form a cartel and do not cheat? What is the equilibrium outcome if at least one firm decides to cheat?

Question

Table: Firms A, B $$\begin{array} { | c | l | c | c } 
\hline & & \begin{array} { c } 
\text { Firm B (profits } \
\text { millions) }
\end{array} & \
\hline & & \text { Restrict Output } & \text { Expand Output } \
\hline \text { Firm A (profits } & \text { Restrict output } & \$ 15 , \$ 15 & \$ 6 , \$ 25 \
\hline \text { millions) } & \text { Expand output } & \$ 25 , \$ 6 & \$ 12 , \$ 12 \
\hline
\end{array}$$ 
Refer to the table. What is the equilibrium outcome if Firms A and B form a cartel and do not cheat? What is the equilibrium outcome if at least one firm decides to cheat?

Quizplus · Accepted Answer

The Answer of Table: Firms A, B $$\begin{array} { | c | l | c | c } 
\hline & & \begin{array} { c } 
\text { Firm B (profits } \
\text { millions) }
\end{array} & \
\hline & & \text { Restrict Output } & \text { Expand Output } \
\hline \text { Firm A (profits } & \text { Restrict output } & \$ 15 , \$ 15 & \$ 6 , \$ 25 \
\hline \text { millions) } & \text { Expand output } & \$ 25 , \$ 6 & \$ 12 , \$ 12 \
\hline
\end{array}$$ 
Refer to the table. What is the equilibrium outcome if Firms A and B form a cartel and do not cheat? What is the equilibrium outcome if at least one firm decides to cheat?

Table: Firms A, B Refer to the Table