The figure below shows a situation where the producers of Good X are forming an international cartel. Here, MR = Marginal Revenue, and MC = Marginal Cost. The cartel will set a monopoly price for its output.
A decrease in the global market share of the cartel would lead to a
A. leftward shift of the cartel demand curve and a fall in cartel output.
B. rightward shift of the cartel marginal-cost curve and a rise in cartel output.
C. rightward shift of the cartel demand curve and a fall in cartel output.
D. leftward shift of the cartel marginal-cost curve and a rise in cartel output.
Answer: A
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