The Following Figure Shows the Market Demand Curve [DD'],the Supply

question 5

Multiple Choice

The following figure shows the market demand curve [DD'],the supply curve of the fringe firms [S_F],the cartel's marginal cost curve [MC₀],and the cartel's marginal revenue curve [MR₀].Assume that the cartel behaves like a dominant firm.
-Refer to Figure 13-2.Which of the following statements is true?

• A)The residual demand curve is less elastic than the market demand curve.
• B)The difference between Q_F and Q₀ represent the inefficiency in output from a monopoly.
• C)The total industry output is equal to TC.
• D)The total industry output is the sum of Q_F and Q₀.

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A volatile, flammable, colorless liquid also known as ethanol, commonly used in alcoholic beverages.

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