The steel producers in a country belong to a cartel. Every member is given a production quota, and at first each one makes the greatest amount permitted by that quota. What effect would permitting the producers to buy and sell the quotas among themselves have on total steel output and the industry’s overall profits?
- Aincrease production, increase total profits
- Bincrease production, no change in total profits
- Cno change in production, increase total profits
- Dno change in production, no change in total profits