Quebec is the world’s largest maple syrup producer, and in the spring of 2017, its production increased by 4 million pounds over the previous year to 152.2 million pounds. The Federation of Quebec Maple Syrup Producers regulates how much farmers can sell and it increased production quotas in a bid to restore market share lost to the U.S. producers in the past decade. Quebec farmers oppose the federation’s quota on output, and some producers exceed their quotas and sell on a black market. U.S. producers increased their share of the world market with a 23 percent increase in output in 2016.

a. If the Quebec and U.S. maple syrup producers become a profit-maximizing colluding oligopoly, explain how they would influence the price of maple syrup.

b. Draw a graph to illustrate your answer to (a).

c. Why is it difficult for the Quebec cartel to act like a monopoly? Use the ideas of game theory to explain.