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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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