Once a Cartel Establishes Its Profit-Maximizing Price

question 115

Multiple Choice

Once a cartel establishes its profit-maximizing price,

• A) entry into the industry of new competitors will not affect the cartel's profits.
• B) output changes by cartel members have no effect on the market price.
• C) each cartel member is tempted to cheat on the cartel price in order to add to its profit.
• D) all cartel members have a strong incentive to adhere to the agreed-upon price.

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Definitions:

Negative

Pertaining to a lack, absence, or detrimental aspect of something, often leading to adverse outcomes or impressions.

Ethical Workplace

A work environment guided by moral principles that ensure fairness, respect, and integrity in decision-making and behavior.

Managers' Behavior

The actions, strategies, and practices employed by managers in guiding, directing, and influencing the work of their team members.

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