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Business, 12.11.2020 18:50 cordovamaria22

Below is a hypothetical demand schedule for monosodium glutamate (MSG). Suppose that Ajinomoto holds 50% of the market, Jiali holds 30% of the market, and Quingdao holds 20% of the market. Price of monosodium Quantity of MSG demanded glutamate ($ per pound) (millions of pounds)$8 0$7 20$6 30$5 40$4 60$3 90$2 110$1 180$0 300(a) Suppose the three firms agree to form a cartel to fix production of monosodium glutamate. Assume marginal cost equals zero, and the output is split equally across the firms. What quantity maximizes the cartel's profit?(b) Suppose Ajinomoto's marginal cost remains equal to zero, but for Jiali and Quingdao, marginal costs rise above zero. How would this affect the incentive of Ajinimoto to act noncooperatively and change its output?I) Ajinomoto will not have an incentive to decrease its output of MSG. ii) Ajinomoto will have an incentive to change its output. iii) Ajinomoto will not have an incentive to increase its output of MSG.

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