In a Sense,a Cartel Is Self-Destructive Because

question 25

Multiple Choice

In a sense,a cartel is self-destructive because

• A) it reduces consumer surplus.
• B) it sets price above marginal cost.
• C) each cartel member has the incentive to cheat on the cartel.
• D) each cartel member earns economic profit.

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Definitions:

Actual Authority

The express and implied powers granted by a principal to an agent to act on the principal’s behalf.

Apparent Authority

The appearance or assumption of authority based on the actions or words of the principal, which a third party reasonably believes the agent has.

Implied Authority

Authority of an agent that is not expressly granted but rather implied by the actions, situation, or responsibilities given to the agent.

Implied Ratification

The act of accepting or endorsing a previously unauthorized action or agreement through behavior that implies approval, rather than through explicit consent.