-The figure above shows a market that a cartel controls.If the firms in the cartel produce ________ units,they will ________.
A) 5; maximize joint profits
B) 5; minimize joint costs
C) 10; create a deadweight loss
D) 10; maximize joint profits
E) between 5 and 10; generate an efficient outcome

Question

-The figure above shows a market that a cartel controls.If the firms in the cartel produce ________ units,they will ________.
A) 5; maximize joint profits 
B) 5; minimize joint costs 
C) 10; create a deadweight loss 
D) 10; maximize joint profits 
E) between 5 and 10; generate an efficient outcome

Quizplus · Accepted Answer

A cartel maximizes joint profits by producing the quantity where marginal cost equals marginal revenue, which is typically less than the competitive quantity. In this case, producing 5 units would maximize joint profits.

-The Figure Above Shows a Market That a Cartel Controls