A cartel of 10 firms that controls 100 percent of the output in a market and faces the same cost schedules that a monopolist would in the market will have to set a price somewhat lower than the monopoly price for its product.

Question

Quizplus · Accepted Answer

A cartel that controls 100% of the market output can set the price at the monopoly level, as it effectively acts as a single monopolist.

A Cartel of 10 Firms That Controls 100 Percent of the Output