Figure 11-14

-What quantity would the industry depicted in Figure 11-14 produce if member firms were successfully colluding?

Question

Figure 11-14
 
-What quantity would the industry depicted in Figure 11-14 produce if member firms were successfully colluding?

Quizplus · Accepted Answer

If member firms were successfully colluding, they would collectively reduce the output to the level where the marginal revenue equals marginal cost, which is Q₂ in this case. This allows them to maximize their profits by reducing total production and driving up the price. Therefore, the quantity produced would be Q₂.

Figure 11-14 -What Quantity Would the Industry Depicted in Figure 11-14 Produce