Problem 3. Cartels and Repeated Games. Consider two firms operating in the same market. Market (inverse) demand each year is given by ply) = 65-p. Marginal costs are constant over time at $5 per unit for both firms. a) Suppose the two firms form a cartel and split monopoly profits equally. How much does each firm make per year? b) Suppose that the two firms are competing in price. This means that either firm can 'cheat' by charging a price just slightly (think $0.01) less and get the whole monopoly profit. If it does this, however, the other firm will engage in Bertrand competition forever (so both make zero profit). If the annual interest rate is 12.5%, how much would each firm lose (in present value terms) by cheating