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

question 48

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.On the AD' portion of the demand curve _____.

• A)the cartel and fringe firms will produce equal quantities of output
• B)only the fringe firms will produce output
• C)the demand curve is more elastic
• D)only the cartel acting as a dominant firm will produce output

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