A cartel's profit-maximizing price and output will be identical to the decision of
A) a monopolist.
B) a perfectly competitive firm.
C) a perfectly competitive industry.
D) the largest firm within the perfectly competitive market.
E) the largest firm before the cartel was formed.

Question

Quizplus · Accepted Answer

A cartel, by definition, is a group of firms that collude to restrict output and increase prices, much like a monopolist. Therefore, the profit-maximizing price and output of a cartel will be identical to that of a monopolist.

A Cartel's Profit-Maximizing Price and Output Will Be Identical to the Decision