A cartel maximises industry profit by:

Question

Quizplus · Accepted Answer

Cartels aim to maximize industry profits by producing where marginal revenue (MR) equals marginal cost (MC). This is the point of allocative efficiency, where the market produces the optimal quantity of output at the lowest possible cost. Eliminating quotas and giving secret price concessions may increase profits, but they do not necessarily maximize them. Producing at the kink in the demand curve may result in excess capacity or deadweight loss, reducing overall profits.

A Cartel Maximises Industry Profit By