Question: Using Equation 12.15 from the text, graph the relationship between the number of firms in the market, N, and probability, g, that the game continues

Using Equation 12.15 from the text, graph the relationship between the number of firms in the market, N, and probability, g, that the game continues from one period to the next, needed to sustain collusion in an indefinitely repeated game. What is the greatest number of firms for which collusion would be sustainable if g = 0.95?

πM < (πM/N) (1/1 – g)

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