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Having trouble with this question, can you review and assist? The following figure shows demand and marginal revenue for a cartel with two members, A
Having trouble with this question, can you review and assist?
The following figure shows demand and marginal revenue for a cartel with two members, A and B, the marginal cost curves of which are shown, respectively, as MCA and MG. o 8 E 80 60 40 20 400 MC 800 MCB 1 ,ooo 200 Any output below 600 Q uantity 1 ,200 would all be produced by firm Draw in the total marginal cost curve and label it MCT. To maximize profit the cartel should produce units of output and set a price of The cartel should allocate units of output to firm A and to firm B. Why is it likely that such an agreement to limit quantity would breakdown?
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