Let's consider an k-firm repeated game over an infinite discrete-time horizon t = 0, 1, ... with discount factor o≤ 1. The goods that firms produce are perfect substitutes. Firms are in Bertrand competition. Each firm has constant marginal cost m. The demand at time t is q(t)= D(pt), where ẞ is an expectation of future expansion or contraction and ẞ8 < 1. (i) ẞ and k are fixed, for what values of 8 is full collusion at the monopoly price a sustainable equilibrium of the repeated game? (ii) How does the ease of sustaining collusion change as the rate of expansion or contraction of the industry changes?

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