f two retailers buy a medicine from a wholesaler at Rs 50 and the maximum retail price of the drug is Rs 75, which of the following situation is an example of cartelization?Both agree to sell at prices suited to their needs and Both agree to sell the medicine at Rs 75.Both agree to sell at prices suited to their needs and Both demarcate the area within which each would operate.Both agree to sell at prices suited to their needs.Both demarcate the area within which each would operate.Both agree to sell the medicine at Rs 75.

[60 marks]According to the Competitive and Consumer Act in Australia, cartel is ILLEGAL. A cartel is a collection of firms producing the same (or very similar) product that makes an agreement to fix prices or split the market (among other things). In this question, we try to understand why. Assume that the market is currently supplied by ten identical sellers each with variable cost VC(푞)=3푞 + 1 4 푞2, and the market demand is 퐷 = 10(7 − 푝). Assume that the market demand is sufficiently high that no seller shuts down. (a) [5 marks ]Find each seller’s marginal cost curve. (b) [10 marks ]Assume that there are sufficiently many sellers so that the market can be treated as perfectly com￾petitive. Find the competitive equilibrium. (c) [15 marks ]Compute the consumer surplus and producer surplus in the competitive equilibrium. (d) [5 marks ]Now assume that all the sellers enter a “cartel”, which consists of two agreements: (a) their product is to be sold at 푝 = 5.4; (b) Every seller is to produce 1/10 of the market demand at the cartel price. (Such 1 46p=18 24⽅ > 1 ⼈ ⼉ ⼀⼀ 今 ⼀ ⼀ Ψ→@ 、⼀ ④ 2 1⼀; ⑨ ⼝1 @ 1 B ⼀ ! …d , 1 1 ⼆ 。 E 1 B P P ⼀ ( 1 . (3) ( 2110) ( 0 . - 4 ) 12,0 ) OS: 当 X4X 号= 号 Ps:北 4×(4 ±|=4 ,6 - 3 p= - 49p P =4 q =4 替代 pd 14- 4p= - 4+ 2 pP = 3 q= 2 a cartel is highly illegal for the reason we shall see shortly.) Compute each seller’s output under the cartel. Note that under a cartel, each individual seller does not optimize anymore; they simply act according the cartel agreements. (e) [15 marks ]Compute the consumer surplus and producer surplus under the cartel. Recall that producer surplus by each seller is the difference between their revenue and the variable cost. (f) [5 marks ]Explain why the sellers prefer operating under a cartel to competing with each other without legal restrictions. (Limited to 50 words.) (g) [5 marks ]Explain why the cartel is detrimental to the entire society. (Limited to 100 words.)

In a competitive market,a.only a few sellers sell the same product.b.if one buyer chooses to purchase a large quantity of the product, the price will rise.c.if one seller withholds his product from the market, prices will rise.d.each seller has limited control over the price of his product.

Choose ALL correct answers:Which of the followings is/are an example(s) of a cartel?Group of answer choicesPepsi decides to increase its quantity to earn a higher profit after observing a low quantity supplied by Coke.Coke and Pepsi both charge a low price for their soft drinks as they try to maximise their profit.Coke and Pepsi agree to charge a high price for their soft drinks to earn higher profits.Coke decides to lower its price to get more market share after observing a high price charged by Pepsi.Coke and Pepsi decide to restrict their supplies together to earn higher profits.

A ______ is the only seller in a market.Multiple choice question.cartelpure oligopolistduopolistpure monopolis

In a monopolistically competitive market, which of the following is most likely to be observed?a.Standardized, homogenous productsb.Collusion and price-fixing between firmsc.Government antitrust oversightd.Non-price competition, such as advertising