One of the Reasons Cartels Are Considered Unstable Is That

question 81

Multiple Choice

One of the reasons cartels are considered unstable is that

• A) individual members of the cartel have an incentive to violate the cartel agreement.
• B) member firms reduce their investment, thereby becoming uncompetitive over time.
• C) there are wide fluctuations in price as cartel members vary their output.
• D) consumers seek out substitutes to the cartel product.
• E) it is inefficient to manage individual firms collectively.

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Definitions:

Random Number Intervals

A sequence or range of numbers generated in a way that each number has an equal chance of appearing, used in simulations and probability assessments.

Probability Distribution

A mathematical function outlining all potential values and their probabilities for a random variable within a specific range.

Monte Carlo Method

A computational technique that uses random sampling and statistical modeling to estimate mathematical functions and simulate the behavior of various physical and mathematical systems.