In which of the following cartels is total cartel profit likely to be the highest?

Question

Quizplus · Accepted Answer

The highest total cartel profit is likely to be achieved in a cartel made up of identical firms each producing the same quantity of a homogeneous product. This is because in such a cartel, the market behaves as if there is a single monopolist and the firms can act as a single entity to maximize profits. This results in the highest possible level of profit for the cartel as a whole. In contrast, in the other cartels, there is likely to be more competition among the firms, which can lead to lower profits for the cartel as a whole.

In Which of the Following Cartels Is Total Cartel Profit