(Table: Demand Schedule of Gadgets) Use Table: Demand Schedule of Gadgets.The market for gadgets consists of two producers,Margaret and Ray.Each firm can produce gadgets at a marginal cost of $2 and no fixed cost.Suppose that these two producers have formed a cartel,agreed to split production of output evenly,and are maximizing total industry profits.If Margaret decides to cheat on the agreement and sell 100 more gadgets,Margaret's quantity effect will be a(n) _____ in profit of _____.

A) decrease;$100
B) increase;$100
C) increase;$300
D) decrease;$300

Margaret's quantity effect from selling 100 more gadgets at a marginal cost of $2 each would mean she incurs an additional cost of $200. However, since the question implies that by cheating on the cartel agreement she is able to sell these additional gadgets, it suggests that she is able to sell them at a price higher than the marginal cost. Typically, in a cartel situation, prices are set above marginal cost to maximize profits. Therefore, if Margaret sells 100 more gadgets, and assuming the selling price per gadget is significantly higher than the marginal cost, her profit increase would be more than the cost incurred. The exact profit increase isn't specified in the question or the provided options, but the logic suggests an increase in profit. Among the given choices, the only increase in profit is $300, which implies that the revenue from selling the additional gadgets (not considering the marginal cost here, as we're focusing on the profit increase) outweighs the cost of producing them, leading to an increase in profit.