Use the following to answer question:
-(Table: Demand Schedule of Gadgets)Use Table: Demand Schedule of Gadgets.The market for gadgets consists of two producers,Margaret and Ray.Each firm can produce gadgets with no marginal cost or fixed cost.Suppose that these two producers have formed a cartel,agreed to split production of output evenly,and are maximizing total industry profits.If Margaret decides to cheat on the agreement and sell 100 more gadgets,Margaret's quantity effect will be a(n)_____ in profit of _____.
A)decrease;$250
B)increase;$150
C)increase;$400
D)decrease;$400

Question

Use the following to answer question: 
-(Table: Demand Schedule of Gadgets)Use Table: Demand Schedule of Gadgets.The market for gadgets consists of two producers,Margaret and Ray.Each firm can produce gadgets with no marginal cost or fixed cost.Suppose that these two producers have formed a cartel,agreed to split production of output evenly,and are maximizing total industry profits.If Margaret decides to cheat on the agreement and sell 100 more gadgets,Margaret's quantity effect will be a(n)_____ in profit of _____.
A)decrease;$250 
B)increase;$150 
C)increase;$400 
D)decrease;$400

Quizplus · Accepted Answer

Margaret's quantity effect will be an increase in profit of $400.

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