Which of following is not a condition that must be met for a cartel to maximize its joint profits?
A) Total output by the cartel must be allocated among the member firms such that the individual firm's marginal costs are equal.
B) The cartel must produce the level of output at which its marginal revenues and marginal costs are equal.
C) The cartel must be operating in the inelastic portion of its demand curve.
D) Each member firm must employ the least-cost method of production.
C
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If there is no external cost, then marginal social cost
A) increases as output increases. B) decreases as output increases. C) is constant regardless of the level of output. D) is unrelated to output levels. E) first increases and then decreases as output increases.
Positive expected profits:
A. increase product demand. B. discourage people from supplying goods. C. encourage people to supply goods. D. have no effect on supply decisions.
Small firms can never achieve market power.
Answer the following statement true (T) or false (F)
In the above figure, at the firm's profit maximizing output, total revenue is rectangle
A. 0P2BQ1. B. 0P1AQ1. C. 0P3FQ3. D. 0P5EQ5.