Collusion makes firms better off because if they act as a single entity (a cartel) they can reduce output and increase their prices and profits. But some cartels have failed and others are unstable
Which of the following is a reason why cartels often break down?
A) Most cartels do not have a dominant strategy.
B) Each member of a cartel has an incentive to "cheat" on the collusive agreement by producing more than its share when everyone else sticks with the collusive agreement.
C) Members of a cartel may resent having to share their profits equally.
D) When a cartel is profitable the amount of competition it faces increases.
B
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New growth theory supports the idea that
I. economic growth can continue as long as we keep finding new ideas. II. increases in human capital can lead to greater rates of economic growth. A) I only B) II only C) Both I and II D) Neither I nor II
Demand is more price-elastic
A. If the product is a small part of the consumer's budget. B. In the long run. C. If the product is a necessity. D. If the product has very few substitutes.
How could you use the Case theorem to predict what would happen when smoke from a factory creates dirty air and slightly acid rain for all the residents in the area in a one-mile radius of the plant?
Please provide the best answer for the statement.
Refer to the above table. The multiplier in this economy is:
Answer the following question based on the table below which illustrates the multiplier process resulting from an autonomous increase in investment by $5.
A. 2
B. 3
C. 4
D. 5