(Figure: Collusion) In the figure Collusion, panel (c) gives the combined marginal revenue, demand, and marginal cost curves for an industry containing several firms.Panels (a) and (b) give marginal cost curves for two of those firms.The quantity of output produced by firm 1 when there is collusion in the industry is shown by:
A)F.
B)G.
C)H.
D)K.

Question

Quizplus · Accepted Answer

When there is collusion, firms act like a monopoly and produce where combined marginal revenue equals combined marginal cost. The output for firm 1 is determined by its marginal cost curve intersecting the collusive marginal cost, which is shown by point F.

(Figure: Collusion) in the Figure Collusion, Panel (C) Gives the Combined