Assuming identical cost and demand curves,OPEC as a cartel will,in comparison to a competitive industry:
A) Produce greater output and charge a lower price
B) Produce greater output and charge a higher price
C) Produce less output and charge a higher price
D) Produce less output and charge a lower price

Question

Quizplus · Accepted Answer

OPEC as a cartel will produce less output and charge a higher price compared to a competitive industry. This is because as a cartel, OPEC members agree to limit their production to maintain a higher price in the market. In a competitive industry, each firm strives to produce more to increase market share and earn profits. Thus, a cartel such as OPEC can manipulate the market and charge a higher price by limiting output.

Assuming Identical Cost and Demand Curves,OPEC as a Cartel Will,in