One of the Reasons Cartels Are Considered Unstable Is That

question 87

Multiple Choice

One of the reasons cartels are considered unstable is that

• A)it is inefficient to manage individual firms collectively.
• B)consumers seek out substitutes to the cartel product.
• C)there are wide fluctuations in price as cartel members vary their output.
• D)individual members of the cartel have an incentive to violate the cartel agreement.
• E)member firms reduce their investment,thereby becoming uncompetitive over time.

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