To Maximize Joint Profits,a Cartel Must Determine the Level of Output

question 37

Multiple Choice

To maximize joint profits,a cartel must determine the level of output at which:

• A)joint marginal revenue equals the marginal cost of the largest member of the cartel.
• B)marginal revenue equals joint marginal cost.
• C)the horizontally sum of the members marginal cost curves is at a minimum.
• D)joint marginal revenue equals the marginal cost of the smallest member of the cartel.

---

Definitions:

Fixed Overhead Budget Variance

The difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs.

Actual Fixed Overhead Costs

Actual fixed overhead costs are the incurred expenses that do not vary with the level of production or sales, such as rent and salary of permanent staff.

Budgeted Fixed Manufacturing Overhead

The estimated total fixed costs required for the manufacturing process, planned in advance for a specific period.

Materials Price Variance

The difference between the actual cost of materials used in production and the budgeted or standard cost, indicating how effectively a company controls its material costs.