Question 1
Refer to the information provided in Figure 14.1 below to answer the question(s) that follow.
Refer to Figure 14.1. Four firms that produce chewing gum form a cartel. The cartel faces the market demand curve given by
D. At the profit-maximizing output, the total cost for the cartel is
◦ $3,000.
◦ $3,720.
◦ $4,800.
◦ $5,600.
Question 2
Refer to the information provided in Figure 14.1 below to answer the question(s) that follow.
Refer to Figure 14.1. Four chewing gum producing firms form a cartel. The firms have identical cost structures. If the cartel produces the profit-maximizing output level, each firm should produce
◦ 3,000 packs of chewing gum.
◦ 4,000 packs of chewing gum.
◦ 12,000 packs of chewing gum.
◦ indeterminate output levels from this information.
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