Figure 7.3. World Oil Market
-Consider Figure 7.3.Under a profit-maximizing cartel, the quantity of oil produced equals

Question

Figure 7.3. World Oil Market 
-Consider Figure 7.3.Under a profit-maximizing cartel, the quantity of oil produced equals

Quizplus · Accepted Answer

A profit-maximizing cartel aims to maximize joint profits by reducing output to the point where the marginal cost equals the marginal revenue, which typically results in a quantity less than the competitive market output but more than a monopoly output. Without seeing Figure 7.3, the specific answer relies on understanding cartel behavior, which aims to restrict output to increase prices. Among the provided options, 70 barrels likely represents a quantity that is reduced from a competitive level but not as low as a strict monopoly might produce, aligning with typical cartel behavior.