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:

Linear Inequality

An inequality that involves a linear function, representing a range of possible values that satisfy the inequality.

Solution

The answer to a problem or the value or values that satisfy an equation.

Shaded Region

In graphical representations, the area that is marked or colored to highlight a particular portion of the space, often used to represent solutions or subsets in inequality representations.

Inequality

A mathematical statement that expresses the non-equality between two values or expressions.