You Read That 40 Firms That Grow and Export Strawberries

question 205

Multiple Choice

You read that 40 firms that grow and export strawberries to the United States decide to form a cartel. The cartel aims to raise the price of strawberries and reduce output to increase profits for the strawberry growers. You predict that this cartel will probably

• A) not be successful because there are too many firms that are trying to organize the cartel and there are a number of good substitutes for strawberries.
• B) not be successful because it is difficult to export a perishable product like strawberries.
• C) be successful because the demand for strawberries is very inelastic.
• D) be successful because enforcing the rules among only 40 firms is very manageable.

---

Definitions:

Reflection

The process of intentionally thinking about one's actions, experiences, beliefs, and values to gain insights or learning.

Expectancy-value Theory

A psychological theory that explains behavior as driven by the belief that one's effort will lead to desired outcomes and the value of those outcomes to the individual.

Goal

denotes an objective or desired outcome that a person or a system aims to achieve.

Effort

The amount of physical or mental energy expended to achieve a goal or perform a task.