Use the Following to Answer Question

question 69

Multiple Choice

Use the following to answer question:
Figure 11.2
-(Figure 11.2) The graph depicts the market demand curve for a two-firm industry with no fixed costs. Suppose that the two firms are colluding by acting like a monopolist, with each firm producing half the market output. If one of the firms cheats on the cartel agreement and produces an additional unit of output, its profits will rise from:

• A) $16 to $18.
• B) $32 to $36.
• C) $24 to $32.
• D) $8 to $12.

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Definitions:

Clinton Administration

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A form of government in which power is vested in the people, either directly or through elected representatives.