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.
If the world market for Good X were perfectly competitive, the price per unit would be ________ and the producer surplus would be
A. $600; $22.5 billion.
B. $500; $10.0 billion.
C. $1,000; $50.0 billion.
D. $600; $90.0 billion.
Answer: A
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