Assume a cartel that consists of two firms has determined its profit-maximizing level of output and must now decide how to allocate total output between the two firms.Assuming firm A's marginal costs are less than firm B's marginal costs,firm A should produce a smaller share of total output than firm B.

Question

Quizplus · Accepted Answer

Given that firm A has lower marginal costs, it would be more efficient for firm A to produce a larger share of the total output than firm B, as it can produce at a lower cost.

Assume a Cartel That Consists of Two Firms Has Determined