Firms in a cartel produce a quantity at which marginal revenue exceeds marginal cost.

Name: Firms in a cartel produce a quantity at which marginal revenue exceeds marginal cost.
Brand: Quizplus
Rating: 5.0 (37 reviews)

Question

Quizplus · Accepted Answer

In a cartel, firms collude to maximize their joint profits. To do this, they restrict output to a level where marginal revenue exceeds marginal cost. This is because producing at a level where marginal revenue is less than marginal cost would result in the cartel losing money.

Firms in a Cartel Produce a Quantity at Which Marginal