$70 $45 FIRM IN A CARTEL 80 98 MC ATC The graph above shows a firm which is part of a cartel. Suppose that when the cartel agreement is in place and all firms abide by the agreement, then each firm produces 80 units of output and the cartel is able to charge the price of $70 per unit. Suppose a firm cheats on the agreement by increasing its output to 98 units. Using the information given in the graph above, calculate the cheating firm's profit when it cheats on the cartel agreement (you can assume that the price charged by the cartel does not change). $450 $6,860 O $2,450 $2,000

$70 $45 FIRM IN A CARTEL 80 98 MC ATC The graph above shows a firm which is part of a cartel. Suppose that when the cartel agreement is in place and all firms abide by the agreement, then each firm produces 80 units of output and the cartel is able to charge the price of $70 per unit. Suppose a firm cheats on the agreement by increasing its output to 98 units. Using the information given in the graph above, calculate the cheating firm's profit when it cheats on the cartel agreement (you can assume that the price charged by the cartel does not change). $450 $6,860 O $2,450 $2,000

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 3SCQ: Consider the curve in the figure below, which shows the market demand. marginal cost, and marginal...

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