(Transcript of audio with descriptions. Transcript includes narrator headings and description headings of the visual content)
(Speaker)
Now suppose that one fleet decides to deviate from their collusion agreement in particular, suppose the EU fleet decides to increase their catch by 100 pounds to 1100 pounds per week. What happens to revenue for each fleet?
(Description)
The table from the previous slide is shown.
The following text is briefly 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?
(Speaker)
If the EU fleet increases their catch by 100 pounds then together both fleets will catch 2100 pounds, 1100 pounds for EU, and 1000 pounds for the US.
(Description)
The third row of the table is briefly highlighted. The cell with the value of, 2100 pounds, is briefly labeled as EU catches 1100 pounds and the U.S. catches 1000 pounds.
(Speaker)
You'll notice that in the table that EU's decision to catch more fish results in a decrease in total revenue.
As the total amount of fish caught increases to 2100 pounds, the price received will decrease to 15 dollars.
(Description)
The third row of the table is briefly highlighted. The cell with the value of, 15 dollars per pound, is briefly labeled as Price falls to 15 dollars per pound.
(Speaker)
We can find the revenue earned by the EU fleet by multiplying the price of 15 dollars by their total catch of 1100 pounds. EU has a total revenue of 16 thousand 500 dollars. The revenue for the US fleet is found similarly. They sell 1000 pounds of fish at 15 dollars per pound and earn a total revenue of 15 thousand dollars.
(Description)
The third row of the table is highlighted. The cell with the value of, 31 thousand 500 dollars, is labeled as EU earns 1100 times 15 dollars equals 16 thousand 500 dollars. U.S. earns 1000 times 15 dollars equals 15 thousand dollars.
(Speaker)
EU's decision to catch more fish allows them to increase revenue whereas the US fleet will lose revenue from the lower price.