Each Member of a Cartel

question 133

Multiple Choice

Each member of a cartel

• A) faces a temptation to cheat on the agreement because lowering its price slightly below the established price will usually increase the firm's sales and profit.
• B) faces a temptation to cheat on the agreement because raising its price slightly above the established price will usually increase the firm's sales and profit.
• C) has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually have no impact on the firm's sales and profit.
• D) has no temptation to cheat on the agreement because raising its price slightly above the established price will usually decrease the firm's sales and profit.
• E) has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually lower the firm's sales and profit.

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Definitions:

Ucc Articles

UCC Articles refer to the sections of the Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States.

Unconscionability

A legal doctrine that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience.

Contract

A legally binding agreement between two or more parties, outlining obligations and rights concerning products, services, or other matters.

Material Alteration

A significant change to a document that affects the rights and obligations of the parties involved.