Table: Three-Country Oil Production Total Market Output (units) Market Price 600 $90 800 80 1,000 70 1,200 60 1,400 50 1,600 40 1,800 30 Suppose that three countries are engaged in oil production. For simplicity, assume zero costs so that revenue equals profit. Assume that the three countries have already formed a cartel, and are collectively producing at the profit maximizing price and quantity. Country A decides to cheat on the cartel agreement by producing 200 more barrels than the other two countries. What is the resultant profit earned by country A? O $70,000 $30,000 $24,000 $6,000

Table: Three-Country Oil Production Total Market Output (units) Market Price 600 $90 800 80 1,000 70 1,200 60 1,400 50 1,600 40 1,800 30 Suppose that three countries are engaged in oil production. For simplicity, assume zero costs so that revenue equals profit. Assume that the three countries have already formed a cartel, and are collectively producing at the profit maximizing price and quantity. Country A decides to cheat on the cartel agreement by producing 200 more barrels than the other two countries. What is the resultant profit earned by country A? O $70,000 $30,000 $24,000 $6,000

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 27CTQ: For many years, the Justice Department has tried to break up large firms like IBM, Microsoft, and...

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Question

Table: Three-Country Oil Production
Total Market Output (units) Market Price
600
$90
800
80
1,000
70
1,200
60
1,400
50
1,600
40
1,800
30
Suppose that three countries are engaged in oil production. For simplicity, assume zero costs so that revenue equals profit.
Assume that the three countries have already formed a cartel, and are collectively producing at the profit maximizing price
and quantity. Country A decides to cheat on the cartel agreement by producing 200 more barrels than the other two
countries. What is the resultant profit earned by country A?
$70,000
$30,000
$24,000
$6,000

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