Even Though a Cartel Is Often Profitable for Its Members

question 28

Multiple Choice

Even though a cartel is often profitable for its members, cartel arrangements contain the seeds of their own disintegration because

• A) a price maintained above each cartel member's marginal cost provides each member with an incentive to offer secret price reductions to attract additional customers.
• B) the profits earned by cartel members will induce others to enter the industry.
• C) cartel members will attempt to garner more of the total profit for themselves by cheating on their agreement with other members.
• D) all of the above are correct.

---

Definitions:

Cultural Elements

Components or aspects that collectively define the lifestyle, values, beliefs, and traditions of a particular society or group.

Canadian-Born

A term describing individuals who were born in Canada, regardless of their ancestry, citizenship status, or the nationality of their parents.

Abstraction

Is the ability to create general concepts that meaningfully organize sensory experience.

Communication

The process of transferring information, ideas, and feelings from one entity or group to another through the use of mutually understood signs, symbols, and language.