Use the following figure to answer the question : Figure 13-2 : shows the market demand curve [DD'],the supply curve of the fringe firms [S F ],the cartel's marginal cost curve [MC 0 ],and the cartel's marginal revenue curve [MR 0 ].Assume that the cartel behaves like a dominant firm.
-Refer to Figure 13-2.On the AD' portion of the demand curve _____.
A)the cartel and fringe firms will produce equal quantities of output
B)only the fringe firms will produce output
C)the demand curve is more elastic
D)only the cartel acting as a dominant firm will produce output

Question

Use the following figure to answer the question : Figure 13-2 : shows the market demand curve [DD'],the supply curve of the fringe firms [S F ],the cartel's marginal cost curve [MC 0 ],and the cartel's marginal revenue curve [MR 0 ].Assume that the cartel behaves like a dominant firm. 
-Refer to Figure 13-2.On the AD' portion of the demand curve _____.
A)the cartel and fringe firms will produce equal quantities of output 
B)only the fringe firms will produce output 
C)the demand curve is more elastic 
D)only the cartel acting as a dominant firm will produce output

Quizplus · Accepted Answer

Only the cartel acting as a dominant firm will produce output.

Use the Following Figure to Answer the Question : Figure