Final answer:
Marginal revenue for a single firm in a cartel is different from the MR curve facing the whole market; it can be higher due to the ability to influence prices with additional output, leading to potential instability within the cartel.
Step-by-step explanation:
Is the marginal revenue facing a single firm in the cartel different than the marginal revenue curve facing the whole market? Yes, the marginal revenue (MR) curve for a single firm in a cartel is typically steeper than for the whole market, which behaves more like a monopolist.
A firm in perfect competition is a price-taker with a perfectly elastic demand curve, meaning its MR curve is horizontal at the market price because every additional unit sold increases revenue by exactly the market price. However, if firms form a cartel, they act collectively as a monopoly, deciding on output quantity where MR equals marginal cost (MC). The cartel's MR curve slopes downward since it can influence the price by changing its output.
The single firm within a cartel, if cheating and producing more than the agreed quantity, faces a downward-sloping MR curve because the extra output could affect market prices to some extent. Therefore, the single firm's MR in a cartel could potentially be higher than that of the cartel as a whole since the firm could benefit from producing additional units at a higher price than if it strictly followed cartel agreements. Ultimately, this could lead to a breakdown of the cartel as other firms start cheating as well.