Use the figure to answer the following question(s).
Figure 11-13

If the firms in the industry depicted in Figure 11-13 can effectively operate as a cartel, what would the industry's price and output be?

Question

Use the figure to answer the following question(s).
Figure 11-13

If the firms in the industry depicted in Figure 11-13 can effectively operate as a cartel, what would the industry's price and output be?

Quizplus · Accepted Answer

If the firms in the industry depicted in Figure 11-13 can effectively operate as a cartel, they would collectively produce the quantity where marginal cost (MC) equals marginal revenue (MR). From the graph, this occurs at an output of 300 units, and at this level of output, the price would be $25. Thus, the correct answer is C.

Use the Figure to Answer the Following Question(s)