(Transcript of audio with descriptions. Transcript includes narrator headings and description headings of the visual content)
(Speaker)
Once the US fleet realizes that the EU fleet has cheated, they will also retaliate by increasing their production by an additional 100 pounds per week. What happens to revenue earned by each fleet?
(Description)
The table from the previous slide is shown.
The following text is briefly written above the table:
In retaliation for cheating by the EU fleet, the U.S. fleet also expands its catch by 100 pounds per week. What is the revenue to the U.S. fleet? To the EU fleet?
(Speaker)
Now that each fleet is going to catch 1100 pounds of fish then total fish caught will be 2200.
(Description)
The following text is written above the table:
Suppose the EU fleet cheats by expanding its own catch by 100 pounds per week. The U.S. fleet doesn't change its catch. What is the revenue for the U.S. fleet? To the EU fleet?
The fourth row of the table is highlighted. The cell with the value, 2200 pounds, is briefly labeled as EU catches 1100 pounds and the U.S. catches 1000 pounds.
(Speaker)
As the fleets catch more fish, the price per pound will continue to decrease. As the total caught increases to 2200 pounds, the price per pound will decrease to 14 dollars.
(Description)
The cell with the value, 14 dollars per pound, is briefly labeled as Price falls to 14 dollars per pound.
(Speaker)
We can see in the highlighted row that total revenue will also be lower. Now each fleet will be selling 1100 pounds of fish at a price of 14 dollars. Each fleet will earn 15 thousand 400 dollars.
(Description)
The cell with the value of, 30 thousand 800 dollars, is labeled as EU earns 1100 times 14 dollars equals 15 thousand 400 dollars. U.S. earns 1000 times 14 dollars equals 15 thousand 400 dollars.
(Speaker)
You'll notice the decision to retaliate by the US will cause the revenue to increase from 15 thousand dollars, but the revenue of the EU fleet will decrease from 16 thousand 500 dollars. Collectively both fleets were better off under the collusion agreement.