The following graphs show marginal cost curves for two firms that would like to form a cartel
Question:
The following graphs show marginal cost curves for two firms that would like to form a cartel in the market in which they are selling.
a. Use the two marginal cost curves to construct a combined marginal cost curve, and plot that on the market graph.
b. Label the cartel’s profit-maximizing output and price, as well as the output of each cartel member has an incentive to cheat on the agreement.
Transcribed Image Text:
MC1 MC MR
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a The total marginal cost curve is the horizontal su...View the full answer
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