When deciding on output levels, members of a cartel A. Set their output where MR=MC B. Produce the same level of output as if th

Question

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When deciding on output levels, members of a cartel A. Set their output where MR=MC B. Produce the same level of output as if th

ey were in a competitive market C. Take into account the impact of changes on members' profits D. Act as if they were monopolies.

Business

1 answer:

siniylev [52] · Answer 1 · 2022-05-29T13:41:15+03:00

Answer: Option(D) is correct.

Explanation:

Correct option: Act as if they were monopolies.

Cartel is a group of few firms that work towards the common goal. Because all the cartel members works together, that's why they act like a monopolies.

They decided to produce at a level where their combined marginal revenue is equal to the combined marginal cost.

Because they behave like a monopolist, so they sell lesser quantity at a higher prices than would be in a perfectly competitive market.