Let inverse demand, marginal cost and average total cost given by: -) P =40-0.5Q MC = ATC = 10 1. Calculate the monopoly equilibrium {. NOTE USE ( MARGINAL REVENUE = DOUBLE SLOPE) [( Q) INSTEAD OF o.5c1)]} 2. Suppose that there are two producers who wish to form a cartel. If they split up the total production evenly between both of them, how much will each produce? What will each profits be? 3. Suppose that one producer deviates from the cartel agreement How much will this producer produce? What are each producers individual profits in this case? 4. Suppose that both producers deviate from the agreement. Find each producer's bestresponse function. What are the Nash equilibrium quantities and associated profits? 5. Summarize your results from b-d in a payoff matrix. 6. What outcome would you expect to occur in this setting? Is co operation likely in this one-shot, static game? 7. Suppose that the producers make the choice to Cooperate or Defect infinitely many times (i.e. they repeat the game indefinitely). If each discounts the future at rate 5