question archive When a cartel maximizes its profit, A
When a cartel maximizes its profit, A
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When a cartel maximizes its profit,
A. total output is greater than it would be without collusion.
B. industry marginal revenue equals industry marginal cost at the level of total output.
C. each firm necessarily produces the same amount.
D. the industry level of output is efficient.
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When a cartel maximizes its profit, B. industry marginal revenue equals industry marginal cost at the level of total output.
When a cartel is formed the entire industry acts as a single firm. The profit maximization level of operation is at the point when the marginal revenues are equal to the marginal cost. Similarly, a cartel would maximize its profits if they produce at the profit maximization at the industry level.
