An employer's cartel will seek to:
A)restrict the employment of the input and lower its price below its marginal revenue product.
B)restrict the employment of the input and raise its price to the marginal factor cost.
C)decrease the price of the input by employing more units of the input.
D)restrict the employment of the input and increase its productivity.

Question

Quizplus · Accepted Answer

An employer's cartel, by restricting the employment of the input, aims to lower its price below its marginal revenue product. This is because by limiting the supply of the input (e.g., labor), the cartel can exert downward pressure on the price of that input, benefiting the employers in the cartel by reducing their costs.

An Employer's Cartel Will Seek To