(Figure: Market for Two-Firm Industry II) the Graph Depicts the Market

Multiple Choice

(Figure: Market for Two-Firm Industry II) The graph depicts the market demand curve for a two-firm industry with no fixed costs. Suppose that the two firms are colluding by acting like a monopolist, with each firm producing half the market output. If one of the firms cheats on the cartel agreement and produces an additional unit of output, its profits will rise from:

A) $16 to $18.
B) $32 to $36.
C) $24 to $32.
D) $16 to $24.