Suppose that four firms have agreed to operate as a cartel in order to maximize joint profit. The cartel will operate with the following inverse demand function and total cost function where Q is the...

Suppose that four firms have agreed to operate as a cartel in order to maximize joint profit. The cartel will operate with the following inverse demand function and total cost function where Q is the market output and P is the market price in dollars.

              P = 4,000 – 2Q                   Inverse Demand Function

              TC = 800Q                        Total Cost Function

1. Determine the market price and the market output set by the cartel.


2. Determine the profit earned by each firm if they share the market equally.