Final answer:
If two firms decide to collude and produce half of the monopoly output, each firm will produce one-fourth of the monopoly output. The cartel will charge the monopoly price and earn a profit based on the quantity supplied by each firm.
Step-by-step explanation:
In a cartel, firms collude to set prices and output levels cooperatively. If two firms decide to collude and produce half of the monopoly output in the market, each firm will produce one-fourth of the monopoly output.
The price charged by the cartel will be the monopoly price, which is typically higher than the competitive price in a perfectly competitive market.
The profit earned by the cartel can be calculated by multiplying the difference between the price charged and the cost of production by the quantity supplied by each firm.