One Factor That Has Prevented the Formation of Cartels for Producers

question 209

Multiple Choice

One factor that has prevented the formation of cartels for producers of commodities is that:

• A) The demand for commodities tends to be price inelastic
• B) Substitute products exist for many commodities
• C) Commodity produces have been able to dominate world markets
• D) Production of most commodities is capital intensive

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Definitions:

Syndicate Sells

Occurs when a group of investment banks work together to sell a large issue of securities to the public or to institutional investors.

Venture Capital

A form of private equity financing provided by investors to startups and small businesses with strong growth potential in exchange for equity, or an ownership stake.

High-risk Project

A project that carries a greater-than-average chance of failing to meet its goals or losing the invested capital due to various uncertainties.

Start-up Firm

A newly established business, often in the early stages of development, focusing on a unique product or service offering in the market.