Cartels Are More Likely to Fail When _____

question 45

Multiple Choice

Cartels are more likely to fail when _____.

• A) the firms in the cartel produce identical products
• B) the marginal cost of production is high
• C) the number of firms forming the cartel is high
• D) the demand for the good is perfectly inelastic

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Definitions:

Total Assets Ratio

Total assets ratio is a financial metric used to assess a company's efficiency in using its assets to generate revenue.

Net Income

The net income a company earns once all expenses and taxes are subtracted from the total revenue.

Operating Cash Flow

Cash generated from a company's normal business operations, indicating whether a company can generate sufficient positive cash flow to maintain and grow its operations.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet account balances to calculate cash flow from operating activities.