Cartel Pricing. The domestic color separator manufacturing industry is highly concentrated with only three active firms. Color separators are used in the production of high-quality images used to produce glossy color, pamphlets, newspapers, etc. Annual output and the marginal cost of production for production grade models produced by each company are as follows:

Competition from low-priced imports has been effectively limited by import tariffs (taxes). Given this import protection, domestic firms are able to sell as much output as they wish at the current wholesale market price of $35,000. However, industry prices haven't risen above $35,000 because this price triggers a flood of foreign competition.

Question

Cartel Pricing. The domestic color separator manufacturing industry is highly concentrated with only three active firms. Color separators are used in the production of high-quality images used to produce glossy color, pamphlets, newspapers, etc. Annual output and the marginal cost of production for production grade models produced by each company are as follows:

Competition from low-priced imports has been effectively limited by import tariffs (taxes). Given this import protection, domestic firms are able to sell as much output as they wish at the current wholesale market price of $35,000. However, industry prices haven't risen above $35,000 because this price triggers a flood of foreign competition.

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The Answer of Cartel Pricing. The domestic color separator manufacturing industry is highly concentrated with only three active firms. Color separators are used in the production of high-quality images used to produce glossy color, pamphlets, newspapers, etc. Annual output and the marginal cost of production for production grade models produced by each company are as follows:

Competition from low-priced imports has been effectively limited by import tariffs (taxes). Given this import protection, domestic firms are able to sell as much output as they wish at the current wholesale market price of $35,000. However, industry prices haven't risen above $35,000 because this price triggers a flood of foreign competition.