10 3 20 Therefore,Firms 1 and 4produce 2 units each and Firms 2 and 3produce3 units each. c.At this shipping level,which firm has the most incentive to cheat?Does any firm not have an incentive to cheat? At this level of output.Firm 2 has the owest marginal cost for producing one more unit beyond its allocation,ie.,MC=21 for the fourth unit for Firm2.Inaddition. MC=21 is less than the price of $25.For all other firms,the next unit has a marginal cost equal to or greater than $25.Firm 2 has the most incentive to cheat,while Firms 3 and 4 have no incentive to cheat,and Firm 1 is indifferent. 10 3 20 Therefore, Firms 1 and 4 produce 2 units each and Firms 2 and 3 produce 3 units each. c. At this shipping level, which firm has the most incentive to cheat? Does any firm not have an incentive to cheat? At this level of output, Firm 2 has the lowest marginal cost for producing one more unit beyond its allocation, i.e., MC = 21 for the fourth unit for Firm 2. In addition, MC = 21 is less than the price of $25. For all other firms, the next unit has a marginal cost equal to or greater than $25. Firm 2 has the most incentive to cheat, while Firms 3 and 4 have no incentive to cheat, and Firm 1 is indifferent