(Table: Demand Schedule for Gadgets) Look at the table Demand Schedule for Gadgets.The market for gadgets is dominated by two producers, Margaret and Ray.Each firm can produce gadgets at a marginal cost of $0.The table shows the market demand schedule for gadgets.Suppose that these two producers have formed a cartel and are maximizing total industry profits.If Margaret decides to cheat on the agreement and sell 100 more gadgets, the market price of gadgets will be _.
A)$4
B)$5
C)$6
D)$7

Question

Quizplus · Accepted Answer

If Margaret sells 100 more gadgets, the total quantity increases, leading to a lower market price. The price falls to $4 as per the demand schedule.

(Table: Demand Schedule for Gadgets) Look at the Table Demand