sentences:  To be more precise, suppose that firms have a discount factor formula_1.The discounted value of the cost to cheating and being punished indefinitely are
  The firms therefore prefer not to cheat (so that collusion is an equilibrium) if
  
  Classical economic theory holds that Pareto efficiency is attained at a price equal to the incremental cost of producing additional units.Monopolies are able to extract optimum revenue by offering fewer units at a higher cost.