Question: 2 . [ 1 5 ] Draw demand and supply curves for a good that is not private and use your graph to show that
Draw demand and supply curves for a good that is not private and use your graph to show that if the suppliers collude and all agree to charge a monopoly price higher than their marginal private cost, it might make the total surplus from the market for all the economy higher than if the suppliers acted perfectly competitively. Explain how this can occur. Is it possible that the buyers of the good in the market of part a also benefit from the collusion even though the output price is higher? If so show in a graph how it is possible. If not, justify your claim that it is not possible.
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