A cartel's profit-maximizing quantity occurs where the cartel's
A)marginal cost equals marginal revenue
B)marginal cost equals demand
C)price is highest
D)cost is lowest
E)demand curve has a kink

Question

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A cartel's profit-maximizing quantity occurs where the cartel's marginal cost equals marginal revenue. This is because at this point, the cartel is producing the quantity of goods that maximizes its profits while taking into account the costs of producing those goods. If the marginal cost is lower, it makes sense to produce more goods because the additional cost of producing an extra unit is less than the revenue generated from selling that extra unit. Conversely, if the marginal cost is higher, it makes sense to produce fewer goods because the additional cost of producing an extra unit is greater than the revenue generated from selling that extra unit.

A Cartel's Profit-Maximizing Quantity Occurs Where the Cartel's