You are one of two member nations of OOEC: the Organization of Otter Exporting Countries, a cartel designed to artificially restrict otter output in an attempt to generate monopoly profits. Demand conditions are such that various combinations of output yield the profits in the payoff matrix below:

a. If your country is able to successfully collude with the other country, how many otters will each country produce, and how much profit will each earn?
b. What is the equilibrium outcome in this game if it is only played once? Is the equilibrium outcome a good one for your country?

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other Country Produce Produce 1,000 Otters 2,000 Otters Produce 1,000 Otters S500, S500 $250, S700 Your Country Produce S700, S250 $400, S400 2,000 Otters