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

Question

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

Quizplus · Accepted Answer

The combined profit of the cartel is maximized when they produce the quantity where marginal revenue equals marginal cost, which is $0. The table likely shows that at this quantity, the total revenue is $32, which is the profit since there are no costs.

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