What happens to the market outcome if cartel members cheat on the coll

What happens to the market outcome if cartel members cheat on the collusive agreement?

A) Price declines, but firm-level quantities remain the same because the firms act like price takers
B) Price and quantity revert to the single-seller monopoly equilibrium outcome
C) Other firms raise prices so that the average market price remains unchanged
D) Price declines and quantity increases toward the perfectly competitive equilibrium

 

ANSWER

D

 

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