Table 17-9 The Table Shows the Demand Schedule for a Particular Product

question 71

Multiple Choice

Table 17-9
The table shows the demand schedule for a particular product.
-Refer to Table 17-9. Suppose the market for this product is served by two firms that have formed a cartel. If the marginal cost of production is $0 and there is no fixed cost, the combined profit of the cartel will be

• A)$16
• B)$24
• C)$30
• D)$32

---

Definitions:

Reinvestment Risk

The risk that future cash flows from an investment will not be reinvested at the same rate as the initial investment, affecting the overall return.

Perfectly Negatively Correlated

A statistical measure indicating that two variables move in opposite directions to one another completely and consistently.

Global Minimum Variance Portfolio

A portfolio strategy that seeks to minimize the total variance of portfolio returns, focusing on the lowest possible risk for a given set of securities without targeting specific returns.

Expected Rate of Return

The average return anticipated on an investment, based on historical data or probabilistic models.