Use the Following to Answer Questions

question 251

Multiple Choice

Use the following to answer questions:
-(Table: Demand Schedule for Gadgets) Look at the table Demand Schedule for Gadgets. The market for gadgets consists of two producers, Margaret and Ray. Each firm can produce gadgets with no marginal cost or fixed cost. Suppose that these two producers have formed a cartel, agreed to split production of output evenly and are maximizing total industry profits. If Margaret decides to cheat on the agreement and sell 100 more gadgets, Margaret's price effect will be a(n) _____ in profit of _____.

• A) decrease; $400
• B) increase; $400
• C) increase; $250
• D) decrease; $250

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Definitions:

Capital Credit

Refers to the allocation or distribution of a cooperative's net income back to its members based on their proportionate contribution or usage, often in the utility or service sector.

Partners' Capital Statement

A financial document that shows the changes in the equity of each partner in the business over a period of time.

Capital Account Balances

The financial records that show the contributions, withdrawals, and ownership interest of investors in a company.

Initial Investment

The amount of money used to start a project, purchase an asset, or initiate operations in a new business.