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coldgirl [10]
3 years ago
10

If an industry consisting of two firms produces a total of 12 units, the market price is $10. If 13 units are produced, the pric

e falls to $9. Suppose the two firms form a cartel and agree to produce 6 units each. If one firm cheats and produces 7 units, the cheating firm's revenue rises by _____ and the noncheating firm's revenue falls by _____.
$3; $12


$6; $12


$6; $6


$3; $6
Business
1 answer:
Olenka [21]3 years ago
8 0

Answer: $3; $6

<span>The two firms formed a cartel which means they agree to produce same with the purpose of maintaining prices at a high level and restricting competition.</span> In the case of two firms who agree on producing 6 units but one cheat, this will be the effect:

<span><span>At 6 units each, and a market price of $10, each firm will have a gross sale of $60. If one cheats and produced 7, the market price will fall to $9, resulting to $63 (7*9)  and a gain of $3. The noncheating firm will acquire a sale of $54 (6*9) only or a loss of $6. The answer is  </span><span>$3; $6.</span></span>
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$4.48

Explanation:

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According to business strategy, the <u>Profitability</u> ratios measure how much-operating income an organization can generate relative to assets, owners' equity, and sales.

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Learn more about the Profitability ratio here: brainly.com/question/25253887

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