Assume that an eight-firm cartel supplies 500 million units of Whatailsya energy drink at a price of $5.00 per unit. Each firm supplies an equal share of the cartel's output. One firm decides to cheat and supplies 50 million extra units, causing the price of Whatailsya to decrease to $4.50 per unit.

Assuming that the loss due to the fall in price is evenly spread across all firms in the cartel, what is the net gain for the cheating firm, in millions of dollars? Round your answer to the nearest million.

Answer rating: 100% (QA)

Solution Heres how we can break down the calculation of the cheating firms net gain 1 Revenue Before ... View the full answer