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Suppose Yakov and Ana form a cartel and behave as a monopolist

Economics

Suppose Yakov and Ana form a cartel and behave as a monopolist. The profit-maximizing price is per gallon, and the total output is gallons. As part of their cartel agreement, Yakov and Ana agree to split production equally. Therefore, Yakov's profit is _____ , and Ana's profit is _____. Suppose that Yakov and Ana have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Yakov says to himself, "Ana and I aren't the best of friends anyway. If I increase my production to 45 gallons more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow." After Yakov implements his new plan, the price of water to per gallon. Given Ana and Yakov's production levels, Yakov's profit becomes _____ and Ana's profit becomes _____. Because Yakov has deviated from the cartel agreement and increased his output of water to 45 gallons more than the cartel amount, Ana decides that she will also increase her production to 45 gallons more than the cartel amount. After Ana increases her production, Yakov's profit becomes _____, Ana's profit becomes _____, and total profit (the sum of the profits of Yakov and Ana) is now _____.

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