Suppose Two Firms, FastNet and SmartCast Are the Only Fast

Multiple Choice

Suppose two firms, FastNet and SmartCast are the only fast Internet providers in a city. They have identical costs and one firm's service is a perfect substitute for the other's. The industry is a natural duopoly. Suppose that FastNet and SmartCast collude and agree to share the market equally. In this scenario, in Nash equilibrium,

A) both firms cheat to produce less than the agreed amount.
B) one firm complies with the agreement while the other cheats to produce more than the agreed amount.
C) both firms cheat to produce more than the agreed amount.
D) both firms comply with the agreement.