Valid CFA-Level-I Dumps shared by ExamDiscuss.com for Helping Passing CFA-Level-I Exam! ExamDiscuss.com now offer the newest CFA-Level-I exam dumps, the ExamDiscuss.com CFA-Level-I exam questions have been updated and answers have been corrected get the newest ExamDiscuss.com CFA-Level-I dumps with Test Engine here:
Which of the following relationships is/are true in an oligopolistic market with collusion? I). For a firm, marginal revenue = marginal cost II). For a firm, marginal revenue = price III). For the cartel, marginal revenue = marginal cost
Correct Answer: B
When there is collusion, the cartel is effectively a monopoly in the market. A monopolistic firm will try to maximize profits and the relationship, marginal revenue = marginal cost, always holds when you maximize profits. Thus, for the cartel, marginal revenue will equal marginal cost. This, however, does not mean that each individual firm is maximizing its profits. In fact, each is producing at a level that is lower than the profit-maximizing level and has a strong incentive to increase the output if it could prevent others from doing so at the same time.