Assume a group of firms has formed a cartel and the cartel is in engag

Assume a group of firms has formed a cartel and the cartel is in engaged in joint profit maximization. As such, each firm, acting in its own interests, has an incentive to expand production up to the point at which:

A) its marginal cost equals the marginal revenue earned by the cartel.
B) its marginal cost equals the cartel-determined price of the product being sold.
C) its marginal revenue equals the cartel’s marginal costs of production.
D) its marginal cost equals the cartel-determined marginal revenue from the good being sold.

ANSWER

B