00:01
So for this question, we're kind of building off of the basis that we made before when we were talking about how kind of an oligopoly will function.
00:08
And so here we're saying, all right, well, we have that cartel.
00:11
Now, what if they decide not to cooperate? what if they're all kind of a little bit self -interested? so the way you can kind of think about it is that when everyone is self -interested, they're going to say, all right, hey, there is still more profit to be made.
00:23
If i make a few more products and i sell it at that high price, i'm going to have more profit.
00:30
So what they're going to do is they'll start to gradually increase their quantity.
00:36
So the quantity in kind of a more self -involved market where the cartel isn't cooperating with each other will start to increase.
00:46
And so they will start to continue to kind of creep forward as they're not cooperating.
00:51
And they'll find that there's more profit to be made for that individual firm because kind of what they'll be doing is they'll be selling a higher quantity.
00:59
So let's say this is 10 units.
01:01
They'll be selling 11 units at that same price that everybody else is selling at.
01:05
So instead of making only $10 times $100, now they're making $110.
01:14
They're basically just trying to kind of dupe the others and say, all right, i'm going to make one more unit.
01:19
I'm not going to tell anyone.
01:21
And i'm going to sell it for that slightly raised price that we all agreed on.
01:26
And so this can really screw over the guys that you agreed with, the cartel that you're in...