An Industry Has Two Colluding Firms That Act So as to Maximize

An industry has two colluding firms that act so as to maximize total profit in the industry and then split the profits equally.Firm 1 has cost function c( y) = 8y.Firm 2 has cost function c( y) = y².Each firm produces an integer number of units.Market demand is given by Y( p) = 56 - p.

A) Firm 1 should produce 10 units and firm 2 should produce 10 units.
B) Firm 1 should produce 20 units and firm 2 should produce 4 units.
C) Each firm should produce 12 units.
D) Firm 1 should produce 24 units and firm 2 should produce 2 units.
E) None of the above.

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