Question: Consider Exercise 2 again. Assume that the firms form a cartel to act as a monopolist and maximize total industry profits (sum of Firm A and Firm B profits).

a. Determine the optimum output and selling price for each firm.

b. Determine Firm A, Firm B, and total industry profits at the optimal solution found in Part (a).

c. Show that the marginal costs of the two firms are equal at the optimal solution found in Part (a).