A Reason Why It Is Difficult for Producers to Maintain

question 30

Multiple Choice

A reason why it is difficult for producers to maintain a cartel is that

• A) the elasticity of demand for the cartel's output decreases over time.
• B) producers in the cartel have the economic incentive to cheat.
• C) economic profits discourage other producers from entering the industry.
• D) producers in the cartel have the motivation to lower price but not to raise price.

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Definitions:

Ambiguous Situations

Scenarios or circumstances that lack clarity or have multiple interpretations, often leading to confusion or complexity in decision-making.

Stable Rules

Regulations or principles that remain constant and unchanged over time.

Environmental Context

The set of physical, social, and economic conditions surrounding and affecting the existence or development of an entity or subject.

Political Pluralism

The acknowledgment and acceptance of diversity in political beliefs and ideologies within a society.